Tax collected at source (TCS) is applied on high-value product purchase.Seller of the product will collect tax.Buyer will pay TCS along with goods cost.The TCS provision is not logical. Government of India uses to track black money. By enforcing TCS, The government will know about high-value buyers.Section 206C of income tax act, 1961 specifies on which TCS is applied.TCS rates in India are as follows:
This is not applicable when the buyer furnishes a declaration in form 27C to the person who is responsible for collecting TCS, that the goods mentioned above are used for purpose of manufacturing, processing or producing articles or things and not for the purpose of trading.
We know now what TCS is. On which product it is applicable and its rates.Now let us learn process of TCS collection.