Outlook Money
TDS or tax deducted at source is the tax collected on the source of income of a person. The government collects taxes through TDS.
TDS is deducted from different types of income sources. These include salary, professional fees, and interest received on investment and commission, among others.
Any institution making payment deducts a certain amount as TDS. In such a situation, the deductee must also take the certificate of TDS deduction. Through this certificate, the deductee can claim TDS of the tax paid. However, the deductee will have to claim it in the financial year.
TCS is tax collected at source. This tax is levied on the transaction of certain types of goods, such as liquor, timber, scrap, minerals, etc. While taking the price of goods, tax amount is also added to it and deposited with the government.
According to Section 206C (1) of the Income-tax Act, 1961, there is a rule to deduct TCS only on the sale of certain items for business purposes. This does not seem to be the case if the deal is for personal consumption.
The difference between TDS and TCS is the way in which the two taxes are levied. While TDS is levied on the income, TCS is collected at source.
Compiled by Syed Muskan