Difference between TDS and TCS

Hi friends....as we know in CA field we frequently go through TDS , TCS , VAT , CST etc etc.......while filing the returns we would definitely  go through whether TDS has been deducted or not if deducted how much....? and on what income TDS has been deducted.....?? we check all these while filing IT returns.

Firstly we should know what is TDS and what is TCS....and also the difference between TDS and TCS.

TDS (Tax Deducted at Source)

Actually TDS is a very vast topic. There are lot of things to understand in TDS but here we try to give in a brief manner so that the basic Meaning of TDS can be understood. 

For more info and clarity on this refer : TDS (Tax Deducted at Source)

So basically What is TDS...???

• The name itself says that the deduction of Tax. 
• We will deduct it when made some payments like salaries,  Rent, contracts, professional fees, commissions, Deemed Dividend etc. 
• It is one of the modes of collection of taxes, by which a certain percentage of amounts are deducted by a person at the time of making/crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government account. 
• It is similar to "pay as you earn" scheme. 
• It acts as a powerful instrument to prevent tax evasion as well as expands the tax net.
• Every person responsible for making payment of nature covered by TDS provisions of Income Tax Act shall be responsible to deduct tax.

TCS (Tax Collected at Source)

Collection Of Tax at Source

TCS is as the name says it is collection of tax....It is to be collected by the seller by the buyer at the time of sale of Specific category of goods. The collected tax is to be deposited to the govt. The seller has to collect tax from the payer who has purchased the following items and the present TCS rates are:

                                                                                                                             

Nature of Goods	TCS Rates
Alcoholic liquor for human consumption	1%
Tendu leaves	5%
Timber obtained under a forest lease	2.5%
Timber obtained by any mode other than under a forest lease	2.5%
Any other forest produce not being timber or Tendu leaves	2%
Scrap	1%
Parking lot	2%
Toll plaza	2%
Mining and quarrying	2%
Minerals being coal or Lignite or Iron Ore (applicable from 1st July 2012)	1%
Bullion if consideration exceeds Rs. 2 lakhs or Jewellery, If consideration exceeds Rs. 5 lakhs and any amt received in cash (applicable from 1st July 2012)	1%

• The tax collected is to be paid to the Central Government within one week of the last day of the month in which the tax was collected. 
• This payment is made in any branch of Reserve Bank of India (RBI), State Bank of India (SBI), or any other authorized bank. 
• The payment is made accompanied by income tax challan 281. 
• If the tax is collected on behalf of the Government, then the amount can be paid without the income tax challan.

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