Understanding TCS: What is Tax Collected at Source in Simple Terms?

Learn what TCS (Tax Collected at Source) means and its importance in reducing tax evasion while improving compliance.

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TCS (Tax Collected at Source) is a tax applicable on the sale of specified goods like scrap or minerals. The seller collects this tax from the buyer at the time of sale and passes it on to the government. It aims to reduce tax evasion and improve tax compliance.

FAQs & Answers

  1. What goods are subject to TCS? TCS is applicable on the sale of specified goods such as scrap, minerals, and certain other items as per tax regulations.
  2. Who collects TCS? TCS is collected by the seller from the buyer at the time of sale and is then remitted to the government.
  3. What is the purpose of TCS? The primary purpose of TCS is to reduce tax evasion and improve overall tax compliance in the economy.
  4. How does TCS work? When a specified good is sold, the seller adds TCS to the sale amount, collects it from the buyer, and later submits it to the tax authorities.