Who is Required to Pay TCS (Tax Collected at Source)?

Tax Collected at Source (TCS) is a tax that a seller collects from the buyer at the time of selling specified goods or providing certain services. The seller is responsible for collecting TCS and depositing it with the government.

🔹 Who is Required to Collect TCS?

As per Section 206C of the Income Tax Act, the following sellers are required to collect TCS when selling specified goods or services:

✔ Companies (Private Ltd. & Public Ltd.)
✔ Partnership firms
✔ Proprietorships (in specific cases)
✔ Cooperative societies
✔ Local authorities & State/Central Government agencies

📌 Individuals & HUFs (Hindu Undivided Families) need to collect TCS only if their turnover exceeds ₹1 crore (for business) or ₹50 lakh (for professionals) in the previous financial year.

🔹 When is TCS Collected?

TCS is collected at the time of sale of certain specified goods or services.

📌 List of Goods/Services Liable for TCS:

🚀 Key Point: TCS is collected from the buyer at the time of receipt of payment or sale invoice generation, whichever is earlier.

🔹 When is TCS Not Required?

✔ If the buyer is the Government, an embassy, or a recognized international organization.
✔ If the buyer is liable to deduct TDS under any section of the Income Tax Act.
✔ If the sale value does not exceed the threshold limit specified above.

🔹 How is TCS Deposited?

📌 The seller must deposit the collected TCS to the government by the 7th of the following month.
📌 TCS is reported in Quarterly TCS Returns (Form 27EQ).
📌 Buyers can claim TCS credit when filing their Income Tax Return (ITR).

🔹 Conclusion

✔ Sellers of specified goods/services are required to collect TCS from buyers.
✔ TCS rates vary based on the nature of the goods/services.
✔ Buyers can claim TCS as a credit while filing ITR.
✔ Proper compliance with TCS deposit & return filing deadlines is necessary to avoid penalties.