​TDS & TCS

Compliance

What is TDS?

​Tax Deducted at Source (TDS) is a tax collected by the government at the source of the income only. Everyone who has an income is, of course, not charged with this tax. It is only when you have a particular amount of annual income will this tax be applied to your income as well. The person makes this payment deducts the tax at the source of the income itself. The person who receives the payment/ income has the liability to pay tax.

​Why is TDS applied?

​TDS is applied to remove the possibility of tax evasion on a large scale because the tax will be deducted as soon as the payment is paid. The amount of TDS deducted depends on your industry and the kind of salary you are generating. Basically, if your income is taxable, you are also liable to pay TDS as well.

This has allowed a systematic and easy way for the government to have increased their taxation base as well. This has allowed a lot more funds to be readily available for more public projects. This has also removed any middlemen from the process that would delay or add any other expense in the process too.

​What is the Due Date for a Tax Deduction to Deposit TDS to the Government?

​There are certain periods at which TDS has to be registered with the central government:
1) If the payment has been made in the month of March, the TDS has to be filed with the government by the 30 th of April.
2) In any other month, TDS has to be registered within seven days from the end of the month in which the deduction is made.

There are many taxes that are levied as a result of different regulations within the Income Tax Act and other related Acts.

​Some Due dates of TDS Return Filing:

​What is the Due Date for a Tax Deduction to Deposit TDS to the Government?

​There are some penalty taxes that will be added if you fail to meet the TDS deadlines set by the government. There are different late fees and taxes that are added to the different products in this TDS list.

What is TCS?

​​Tax Collection at Source (TCS) is a tax that is levied on the seller that is indirectly collected from the buyer when there is an exchange of any goods. However, every kind of good is not eligible to be taxed as a result of this tax.

How does TCS works?

​Everyone on the market is also not eligible to sell goods that have TCS levied on them. For example, the Central government, State government, Local Authority, Companies and many more stakeholders of the economy can sell goods that have TCS applicable on them. Some of these goods in India are alcoholic liquors that are used for human consumption (including Indian Made Foreign Liquor), scrap, forest products, tendu leaves, jewelry whose value exceeds specified limit, and many more such products.

All these products have different rates TCS levied on them. The entities that are engaging with these products are also not the common public. These buyers are mostly public sector entities, central and state governments, High Commission rates and a few more governmental agencies.

​What is the due date for the tax collector to deposit TCS to the government?

​The tax that has been collected at the source has to be deposited to the central government’s credit within seven days of the last month in which the tax was collected.

​Some Due dates of TDS & TCS Return Filing:

​What happens if you fail to meet these TCS deadlines?

​There is a similar penalty that will added to the entire TCS amount just as a penalty will be added to a delay in the TDS payments.

​Frequent changes in TCS/TDS in some last years.

​There are several frequent changes made by government in TDS/TCS compliances. These are very much complex. Government increasing the scope of TCS/TDS compliances day by day.