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TAX DEDUCTED

TAX DEDUCTED AT SOURCE (TDS) AND TAX COLLECTED AT SOURCE (TCS)


The Indian Income Tax Act provides for chargeability of tax on the total income of a person on an annual basis. The quantum of tax determined as per the statutory provisions is payable as:-
(a) Advance Tax
(b) Self Assessment Tax
(c) Tax Deducted at Source (TDS)
(d) Tax Collected at Source (TCS)
Tax deducted at source (TDS) and Tax collection at source (TCS), as the very names imply aim at collection of revenue at the very source of income. It is essentially an indirect method of collecting tax which combines the concepts of “pay as you earn” and “collect as it is being earned.” At the same time, to the tax payer, it distributes the incidence of tax and provides for a simple and convenient mode of payment. The deducted sum is required to be deposited to the credit of the Central Government.

TAX DEDUCTED AT SOURCE

Tax deducted at source (TDS 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.
TAX COLLECTED AT SOURCE
Tax collected at source (TCS) is to be collected by seller from the buyer at the time of sale of specified category of goods. The TCS rate is different for each category of goods & the TCS so collected by the seller from the buyer is to be required to be deposited with the government account.