Learn the Difference Between TDS and TCS

| | ,

TDS Return Filing is one of the most crucial components of financial management in Income Tax. People should maintain track of their earnings, Investments and make plans for a Life Insurance policy, a name plan, or another Tax-saving strategy. The government does not rely just on Income tax to fund its operations. It also receives excise taxes for us, such as TDS, TCS, and GST, by purchasing products, services, and transactions on our behalf. Those who earn money pay direct taxes. The vendor is obliged to file a tax return with the authorities in the instance of an indirect tax. In this article, we’ll learn about the difference between TDS and TCS.

In terms of income tax, the preceding year’s entire expected earnings are taxable during the evaluation year. There are several scenarios in which a person may be taxed on his or her former pay. TCS and TDS and early tax payments are ways of doing that.

What is the difference between TDS and TCS taxes?

TCS denotes ‘source tax collection’ whilst TDS refers to the deduction from ‘source tax deduction.’ Continue to learn how to identify large discrepancies between TDS and TCS to compare them in greater depth.

Know about TDS (Tax Deducted at Source)

TDS is known as ‘source has drawn’ and is an indirect way to get personal income where profit is directly taken from the income of the recipient. The TDS Return Filing is founded on the ideas of “pay as you earn,” which implies that tax returns are filed earlier and “collect as soon as you receive.” Any payment for specified expenditure that is below TDS is paid following the Income Tax Act 1961 following a deduction of the corresponding percentage.

In other words, the taxpayer preserves a portion of the amount placed at the moment of payment in the State. This TDS Return Filing applies early rather than later to the beneficial owner upon receipt of the whole amount.

TCS (Tax Collected at Source)

Taxes are collected from a buyer or payer of a given category of products when selling specified products in India or at fixed pricing. This is known as tax collected from a source or TCS. Then the business people fill the tax generated by the consumer to the State and get a TCS certificate. Sales of tender sheets, scraps, parking, jewels, alcoholic beverage, and more. The calculating rate of the used TCS depends on the individual device.

TCS calculation under GST

A fixed amount of tax on the total amount of transactions shall be collected by all companies in e-commerce. This rule is effective on 1 October 2018, where a service provider is participating in the provision of goods and services via a tax-related eCommerce operator. Only if delivery is made through an e-commerce operator is TCS collected possibly.

In such circumstances, the TCS tax rate is 1% (with; 0.5% CGST + 0.5% SGST) or 1% IGST.

Important modifications have raised the price of compliance and management for online marketplaces like Flipkart, Snapdeal, and Amazon, among others. They must register a tax deduction on the GSTR-8 form on the tenth day of the following month.

Even if their revenues are below the GST refund ceiling, all retailers or dealers selling online products or services would be required to register under GST and claim a tax-deductible by e-commerce operators.

Take a call from Expert

What are the tax collector’s and taxpayer’s accountabilities?

  1.  A tax collection account number must be obtained by the tax collector. A tax deduction account number must be obtained by the taxpayer.
  2.  All TDS Return Filing / TCS-related papers must include the available tax code (as applicable).
  3.  A tax collector must be familiar with and collect taxes according to a scale that is current at the moment. To deduct the money, the taxpayer must do the same thing.

Governmental Consequences of Not Setting TDS or TCS

If a person does not deliver or collect taxes, he or she will be subject to legal action. This comprises a fine equal to the uncollected or uncreated tax. The defendant could be sentenced to three to seven years in imprisonment, as well as a penalty, depending on the circumstances.

If TDS or TCS is not installed, individuals may be obliged to pay interest. The monthly taxable amount owed will be subject to interest charges. In the case of TDS Return Filing, interest will be calculated monthly from the date the tax was due except for the last date (1%) or remitted to the government (1.5%). TCS has a 1% interest rate.

The TDS and TCS differ greatly in all respects. Be it a taxpayer or a deductor, ensure that you comply with the regulations so that any undesirable repercussions are not impaired.


In the event of a value above the limits set when TCS belongs to the tax collected by retailers while vending a certain category of products to the customers, TDS Return Filing relates to the tax paid by the corporation per individual. Payments such as taxes, fees, brokerage, commission, etc., are entitled to TDS deductions.

Bombay HC says refund by builder to buyers not liable to TDS under RERA

Moreover, If you want any other guidance relating to TDS Return Filing, and ITR Filing. Please feel free to talk to our business advisors at 8881-069-069.

Download E-Startup Mobile App and Never miss the latest updates narrating to your business.


Procedure for Conversion of Private Limited Company into LLP

No GST on Papad, whatever Shape, Name or Form


Leave a Comment