Introduction:
The Indian IT Act has measures for the collection of tax at the point of origin. Certain individuals are obligated by these regulations to collect a specific proportion of taxes from their customers on unusual transactions. The majority of such transactions are of a commercial or trade character. It has no effect on an average person.
What goods are included under provisions of TCS?
The items on which the vendor is required to receive tax from customers are governed by Income Tax Act Section 206C.
Taxes are not due when the products listed below are used for manufacturing, processing, or creating anything. If the same products are used for trade purposes, tax is due. The vendor collects the applicable tax at the moment of sale. The TCS rate varies according to the category of goods:
Good Type |
Rate of Tax Collected at Source |
Liquor of an alcoholic character intended for human consumption |
1% |
Timber wood from a leased forest |
2.50% |
Tendu leaves |
5% |
Any forest produce apart from Timber and Tendu leaves |
2.50% |
Timber woods produced by any means other than leased forest |
2.50% |
Scrap |
1% |
Minerals |
1% |
Bullion worth more than 2,00,000 INR or Jewelry worth more than 5,00,000 INR |
1% |
Acquisition of a motor vehicle for more than Rs. 10 lakhs |
1% |
Mining and Quarrying, as well as a parking lot and a toll plaza |
2% |
What are the classification of sellers in Tax Collected at Source?
Some individuals or organisations have been designated as sellers for TCS. Aside from the sellers listed here, no other supplier of products can collect TCS from purchasers.
What is the classification of buyers in Tax Collected at Source?
A buyer is an entity that receives goods of a certain sort by purchasing or right to acquire such items, whether through tender, auction, or any other method. However, the buyers listed below are free from paying tax at the point of sale.
Tax Collected at Source Returns and Payments
What is a TCS Certificate?
When a TCS collector submits his quarterly return in Form 27EQ, he must present the buyer of the goods with a TCS certificate. The document provided for filing TCS returns is Form 27D. This document includes the following information:
This document must be granted within 15 days after the submission of TCS quarterly returns. The deadlines are as follows:
Quarter Ending Date |
Deadline of Form 27D |
30th June |
30th July |
30th September |
30th October |
31st December |
30th January |
31st March |
30th May |
Tax Collected at Source under Good and Service Tax
What are the exemptions under TCS?
TCS is excluded in the following circumstances:
What are the rules regarding Form 24G submission?
Conclusion
The TCS is the tax that the supplier collects from the customer when the purchaser purchases a specified category of products or services. This TCS rate is determined by the type of the products, and the seller must deposit the tax received from the customer with the government. This article provides everything you need to know about Tax Collected at Source.
If an individual fails to submit their TCS return on time, a penalty of 200 INR per day needs to be paid for the duration of the delay. The sum of late charges, however, should not exceed the sum of TCS. Before submitting the TCS return, the late filing costs must be deposited.
If any tax collector submits an improper TCS return, a fine under Section 271H may be imposed. In other terms, if the TCS collector submits an improper TCS return, a minimum fine of 10,000 INR and a maximum fine of up to 1,00,000 INR may be imposed.