What is Tax Collected at Source (TCS)?

The TCS is a tax that is paid by the seller who collects on a sale from the buyer. The TCS is deposited before the due dates to the Income Tax Authorities. Section 206C of the Income Tax Act governs the TCS provisions, and these persons must have a TAN (Tax Collection Account Number) to collect TCS.

However, the seller is only responsible for depositing the tax and collecting it. They are not responsible for paying the TCS from their earnings.

Who Can Collect TCS? 

• A TCS can be collected by the seller from the buyer for the value of goods/services. 
• A buyer is responsible for paying the TCS on the bill amount on the purchase of goods/services. 

When Should TCS be Collected?

A seller can collect TCS on the following dates: 

• When the seller does an entry in the books of credit sales. 
• When the seller gets the money from the buyer through any means, like cash, cheque, or draft. 

Note: On the sale of the motor vehicle, the TCS should be collected after getting the receipt from the buyer.