What is TDS?
- TDS is tax deducted by the payer (e.g., employer, company) before making payments like salaries, rent, or interest.
- It ensures tax collection at the source of income.
- Deductors deposit TDS to the government and file quarterly returns (Forms 24Q, 26Q).
What is TCS?
- TCS is tax collected by a seller at the time of selling specific goods (e.g., alcohol, scrap).
- The seller collects and deposits TCS with the government.
- Collectors must file quarterly returns (Form 27EQ).
Key Differences
- TDS: Deducted by the payer from income payments.
- TCS: Collected by the seller on specified transactions.
Common Rates
- TDS: Salaries (as per slabs), Interest (10%), Rent (2%/10%).
- TCS: Alcohol (1%), Scrap (1%), E-commerce (1%).
Compliance
- TDS/TCS must be deposited on time, and returns should be filed quarterly.
- Deductors/collectors issue certificates to payees/buyers (Form 16/16A for TDS, Form 27D for TCS).
Penalties
- Late deduction or deposit incurs interest and penalties.
- Severe non-compliance may result in prosecution.
FAQ's
The payer making specified payments.
Sale of goods like scrap, liquor, or through e-commerce.
Yes, through income tax return filing.
No, they are separate from GST but have similar mechanisms in some GST cases.
Yes, many tax authorities allow taxpayers to pay in installments under specific circumstances, especially if the amount owed is substantial.
