What is the full form of TCS in Income Tax?
The TCS Full Form in Income Tax is Tax Collected at Source. The Indian Income Tax regime has put in place a two-pronged methodology for tax collection—Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). Focused on income earned from salaries, interest, rent, etc., TDS reaches out to various aspects of income earning. The TCS, on the other hand, deals with specific transactions involving the sale of goods and services. This paper is an attempt to explain the nitty-gritty of TCS, right from its purpose, scope, rate, and required information of the taxpayer.
What is TCS?
Under Tax Collected at Source, sellers deduct a portion of customer payments like tax collectors. At Income Tax, they understand. TCS is governed under 1961 Income Tax Act 206C.
Priorities for TCS implementation:
Government cash flow is improved via upfront income taxation. TCS taxes high-value transactions, enhancing tax compliance. Since sellers deduct tax at sale, buyers are less inclined to hide transaction values, lowering tax avoidance. Income Tax Act transactions are TCS. These transactions often include expensive goods or services.
Sale of Specific Items
TCS covers goods sales beyond a threshold. Most commodities have a Rs. 50,000,000 financial year restriction. Lower criteria apply to certain exceptions.
The TCS rates
TCS rates depend on transactions and taxpayers. Transaction rates vary from 0.1% to 20%, with most around 0.1% to 5%. Income Tax’s website https://www.incometax.gov.in/iec/foportal/ has the newest TCS rates.