TCS Return Filing

Q: e. What are the classifications of buyers and sellers for TCS Provision?

» Buyer Public sector companies Central and State Government Embassy of High commission Clubs such as sports clubs or social clubs Consulate and other Trade Representatives of a Foreign Nation » Seller Central and State Government Statutory Corporation or Authority Partnership firms Company registered under Companies Act. Local Authority Co-operative Society Any person/HUF who is subject to an audit of their accounts under the Income-tax act for a particular financial year.

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What is TCS?

TCS or Tax Collected at Source is the income tax collected in India, that is payable by the seller who collects in turn from the buyer at the sale of specified goods.

Overview

Income tax Act also provides a provision for some people to collect Tax at source at a specific rate for a few specified transactions. Most of these transactions are of a Trading or Business nature. TCS is the Tax collected by a specific seller from a buyer at the time of sale.

After depositing the collected Tax at source, the Collector (i.e. seller) must file a TCS return to the Government for every quarter of a financial year. TCS return is summary submitted by the person collecting the tax at source to the Income-tax Department containing the following details:

Name, PAN, and TAN of the tax collector (i.e., seller)
Name and PAN of the tax collectee (i.e., buyer)
Financial year and quarter for which the return is to be filed.
Category of the tax collector
The party-wise breakup of TCS details in separate annexure for each party along with the total amount collected from each party.
Deposit date of TCS to the Government,
Tax deposit challan details,
Verification statement duly signed by the Collector of Tax.

Classification of Buyer and Sellers for TCS provision:

Buyer
- Public sector companies
- Central and State Government
- Embassy of High commission
- Clubs such as sports club or social clubs
- Consulate and other Trade Representatives of a Foreign Nation
Seller
The following are the specified sellers who are allowed to collect TCS, no other person/organisation are permitted to collect the TCS:
- Central and State Government
- Statutory Corporation or Authority
- Partnership firms
- Company registered under Companies Act.
- Local Authority
- Co-operative Society
- Any person/HUF who is subject to an audit of their accounts under the Income-tax act for a particular financial year.

Goods covered under TCS provision and their applicable rate

Types of Goods	Rate
Liquor of alcoholic nature, made for human consumption	1%
Tendu leaves	5%
Timber wood other than forest leased	2.5%
Timber wood under a forest leased	2.5%
Scrap	1%
Minerals like lignite, coal and iron ore	1%
Purchase of Motor vehicle exceeding the value Rs. 10 Lakhs	1%
Parking lot/Toll Plaza/Mining and Quarrying	2%

Exemption from TCS

TCS on sale of goods

Scope:
Seller who receives any amount as consideration for sale of any goods aggregating to 5 million Indian Rupee (INR) or more in a financial year from a buyer, at the time of receipt of such amount is required to collect tax at source (TCS) at the rate 0.1 per cent on the sale consideration exceeding INR 5 million as income-tax. If the buyer fails to provide PAN/Aadhar, TCS shall be collected at the rate of 1 percent.

Specific Exclusion
TCS on sale of goods under section 206(1H) shall not apply:
where buyer is required to withhold taxes and such buyer has done withholding of required amount.
on export of goods;
on goods that are specifically covered under sub-section (1), (1F) or (1G) of section 206, i.e.: Alcoholic liquor for human consumption, Tendu leaves, Timber or any other forest produce, Scrap, Minerals, being coal, or lignite or iron ore, Motor Vehicle, Overseas tour package.
TCS is not to be collected when the sale is made to the Central or State Government or Embassy/High-commission, Consulate or Trade Representative/Local Authority.
TCS is also not applicable when sale is made to a person who is importing any goods into India.

Compliance Requirement
Due date for payment of TCS collected: 7th of the following month for each month
Quarterly Statement: Due date to file the TCS return and issue certificate:

Quarter ended Quarterly statement TCS certificate

30 June 15 July 30 July

30 September 15 October 30 October

31 December 15 January 30 January

31 March 15 May 30 May

Quarter ended	Quarterly statement	TCS certificate
30 June	15 July	30 July
30 September	15 October	30 October
31 December	15 January	30 January
31 March	15 May	30 May

Types of Form related to TCS

Form	Particular
Form 27C	A declaration furnished by a buyer of the specified goods to the seller in case such goods are to be used for the purpose other than trading.
Form 27EQ	Quarterly TCS return
Form 27D	A certificate issued to the collectee by Collector as an acknowledgement for the Tax collected and deposited.
Form 27G	A monthly statement of return to be furnished by the government collector of Tax for the Tax collected and deposited without a challan.

Deadlines for TCS return filings:

Quarter	Due dates
Q1 – April to June	15^th July
Q2 – July to September	15^th Octobers
Q3 – October to December	15^th January
Q4 – January to March	15^th May

Penalty and Late fees attached TCS return

Section	Minimum liability	Maximum liability
Late filing of Form 27EQ (Interest u/s. 234E)	Rs. 200 per day to date of filing the return.	The maximum amount payable is equal to the amount of tax collected.
Non-filing or incorrect return filing (Penalty u/s. 271H)	RS.10,000/-	RS.1,00,000/-

How can we help you?

We will make sure that TCS return compliance is made within the due dates:
After the end of every quarter, we will coordinate with you for the transaction details and Tax deposit challans.
As per the provided data, we will prepare the TCS return and file the same.
After filing the TCS return, we will provide you with the Form 27D for your collectee.

Still have doubts?

Speak to our experts who shall solve all your doubts.

Call us at 77380 66 334 or Mail us at info@indiacompanyincorporation.com.

FAQs

a. TCS is deducted from what amount?

TCS will be applied to net taxable supplies as a percentage. Section 52 of the CGST Act deals with the TCS provision under GST.

b. Who is liable for TCS?

TCS refers to the tax that a seller must pay and collect from the customer at the time of the sale. The items on which the seller is required to collect tax from the customers are governed by Section 206C of the Income Tax Act.

c. What is the difference between TDS and TCS?

TDS is a tax that is taken from a company’s payment to an individual if the amount exceeds a specified threshold. TCS is a tax that sellers collect when they sell something to a buyer. TDS is deducted from payments such as salaries, rent, professional fees, brokerage commissions, and so on.

d. What are the deadlines for TCS Return Filings?

» Q1 – April to June: 15th July
» Q2 – July to September: 15th Octobers
» Q3 – October to December: 15th January
» Q4 – January to March: 15th May

e. What are the classifications of buyers and sellers for TCS Provision?

» Buyer

Public sector companies
Central and State Government
Embassy of High commission
Clubs such as sports clubs or social clubs
Consulate and other Trade Representatives of a Foreign Nation

» Seller

Central and State Government
Statutory Corporation or Authority
Partnership firms
Company registered under Companies Act.
Local Authority
Co-operative Society
Any person/HUF who is subject to an audit of their accounts under the Income-tax act for a particular financial year.

f. Which form is used to submit a TCS return?

27EQ Form. The information on Form 27EQ is everything about the tax that is collected at the source. This form must be filed every quarter, according to Section 206C of the Income Tax Act of 1961. Both corporate and government collectors and deductors must fill out the form.

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