What is TCS?
TCS is an abbreviation for Tax Collection at Source. The provision of TCS is governed by section 206C. TCS is one of the Models of collecting Income-tax from the taxpayer, where the seller will collect tax from the buyer and will pay the same to the government.
TCS Rate
| Section | Particulars | TCS Rates (in %) (AY 2020-21) | TCS Rates (in %) (AY 2021-22) |
| 206C(1) | Sale of the following: | ||
| a) Alcoholic Liquor for Human Consumption | 1% | 1% | |
| b) Tendu leaves | 5% | 5% | |
| c) Timber obtained under a forest lease | 2.5% | 2.5% | |
| d) Timber obtained by any mode other than under a forest lease | 2.5% | 2.5% | |
| e) Forest produce(any other) not being timber or tendu leaves | 2.5% | 2.5% | |
| f) Scrap | 1% | 1% | |
| g) Minerals, being coal or lignite or iron ore | 1% | 1% | |
| 206C(1C) | Grant of lease or license of the following: | ||
| a) Parking lot | 2% | 2% | |
| b) Toll Plaza | 2% | 2% | |
| c) Mining and quarrying (Other than mining and quarrying of mineral oil, petroleum and natural gas) | 2% | 2% | |
| 206C(1F) | motor vehicle Sale of the value exceeding Rs. 10 lakh whether payment is received by cheque or by any other mode | 1% | 1% |
| 206C(1G)(a) | TCS on foreign remittance through Liberalised Remittance Scheme (LRS) | NA | 5%(10% for non-PAN or Aadhar cases) |
| 206C(1G)(b) | TCS on the selling of overseas tour package | NA | 5%(10% for non-PAN or Aadhar cases) |
| 206C(1H) | TCS on sale of any goods [except goods covered under sec. 206C (1), 206C (1F) and 206C (1G)] | NA | 0.1%(1% for non-PAN or Aadhar cases) |
Notes:
Classification of Seller for TCS
For TCS purpose a seller is defined as any of the following person and organizations:
- Central Government
- State Government
- Local Authority
- Statutory Corporation or Authority
- Company
- Partnership Firms
- Co-operative Society
Classification of Buyer for TCS
TCS shall not be collected by the seller if the Buyer is
- Public Sector Entities or Companies
- Central Government
- State Government
- Embassy of High Commission
- Clubs include sports clubs and social clubs
Goods and Transactions Classified under TCS
The following are considered for collecting tax at source:
- Liquor for human consumption including IMFL
- Timber wood obtained from a forest
- Tendu Leaves
- Timber wood
- Scrap
- Bullion that exceeds over Rs. 2 lakhs/ Jewellery that exceeds over Rs. 5 lakhs
TCS Exemptions
There are two types of exemptions that include total exemption from collecting tax at source and lower-rated TCS.
Steps involved in TCS Compliance
- Collection at source 206(C)
- Submit TCS return within the time
- Deposit tax collected at source to govt.
- Then download TCS certificate form FROM TRACES
How to Make TCS Payment?
- TCS should be deposit in Challan
- Deposit through internet banking.
- Fill accurate TAN in challan
- Minor Head of Challan
- 200: TCS payable by the taxpayer
- 400: TCS Regular assessment raised by Income Tax Department.
- separately Amount shown -TCS, Interest, Late filing fee, penalty, etc.,
Due Date of TCS Return
| Quarter | Period | Due Date |
| 1st | 1st April to 30th June | 15th July 2020 |
| 2nd | 1st July to 30th September | 15th Oct 2020 |
| 3rd | 1st October to 31st December | 15th Jan 2021 |
| 4th | 1st January to 31st March | 15th May 2021 |
CONSEQUENCE ON DEFAULT IN TCS PROVISIONS
| Failure to collect tax at source and paid. [Sec 206C (7)] | Tax with interest @ 1% per month |
| Failure in furnish TCS return within stipulated time [U/S 234E] | Rs. 200 per day and shall not exceed the amount of tax deducted/collected. |
| Penalty for failure to furnish quarterly TCS return [271H] | Rs. 10000/- to Rs. 100000/- |
