If you are scrambling to learn what is Tax Collection at Source or TCS, this article is for you. We have brought this column to you after innumerable people took to the internet and asked about TCS. It is an additional amount collected by a seller from the buyer as tax at the time of sale over and above the same amount and is remitted to the government account. For the unversed, Tax Collection at Source is also mentioned in section 206C of the Income Tax Act, 1961. The government of India introduced Tax Collection at Source or TCS earlier this month. Do you know what is the rate of tax in TCS and who issues a TCS certificate? If not, the following sections are waiting for you. Keep reading this article for more details. Swipe down the page and take a look below.
Earlier this month, on October 1, 2023, the government of India brought TCS or Tax Collection at a Source rate of 20 percent on foreign remittances of over Rs 7 lakh per financial year. Kindly note that the higher rate of tax will not be applicable to expenses such as education and medical. Do you know what was the tax rate earlier? For the unversed, the earlier tax rate was 5 percent. Tax Collection at Source law compels that persons being the sellers of particular goods must charge the tax as per the rule at the time of receipt of money from the buyers. Continue reading this article for more details.
Besides the sale of goods, individuals who register an agreement of lease, contract for parking yard, license, mining, quarrying, and toll plaza, will collect a charge 2 percent rate of tax as TCS from such parties. Here is an imperative question “What should the tax collector and payer do?” The answer is the person collecting tax as TCS will obtain the tax collection account number (TAN) and quote it in all challans, returns, certificates, and other documents pertaining to the transactions. Swipe down the page and read more details.
On the other side, the buyer will provide his permanent account number to the seller, if fails tax will be collected at a higher rate (twice or 5% whichever is higher). Kindly note that the TCS collector will provide a TCS certificate in form 27D to the buyer of the goods. Stay tuned to this website for more details and further updates.