TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) play significant roles in revenue collection. Section 194Q and Section 206C(1H) are two important provisions under these systems, focusing on TDS for purchase of goods and TCS for sale of goods, respectively. This comparison outlines the basic contrasts between these sections, making it easier for businesses and taxpayers to understand their obligations. By grasping these distinctions, individuals can navigate the tax landscape more effectively, ensuring compliance with the law while managing their financial transactions efficiently.
Below TDS on Purchase of Goods and TCS on Sale of Goods Comparison chart will help you to get clear understanding of all the provisions:
| Basis of Comparison | TDS on Purchase of Goods (Section 194Q) | TCS on Sale of Goods (Section 206C(1H)) |
|---|---|---|
| Who is Liable for Deduction/Collection | Buyer | Seller |
| Turnover Limit of Deductor/Collector | Buyer’s total sales should exceed Rs. 10 crores in Preceding Financial year | Collector’s total sales should exceed Rs. 10 crores in Preceding Financial year |
| Effective Date | 1st July 2021 | 1st October 2020 |
| Applies on | Only on Goods Purchased from Resident | Only on Goods sale to Resident |
| Rate | 0.1% | 0.1% (0.075% for FY 2020-21) |
| Amount on which Tax to be Deducted/Collected | On purchase amount exceeding Rs. 50 lakhs | On sale consideration exceeding Rs. 50 lakhs |
| PAN Not Available | 5% | 1% |
| Time of Deduction/Collection | At the time of credit or payment, whichever is earlier | At the time of Receipt of consideration |
| Exemption | Not applicable if: | Not applicable if: |
| a. Tax is deductible under other provisions of the act | a. Tax is collectible under 206C other than 206C(1H) | |
| b. Tax is collectible under 206C other than 206C (1H) | If Buyer is: | |
| a. Importer of goods | ||
| b. Central/State Government, Local Authority | ||
| c. An embassy, High Commission, legation, | ||
| consulate, and trade representation of a | ||
| foreign state | ||
| Preference to be Given | Purchaser is first liable to deduct the tax | Seller shall collect tax if purchaser is not |
| if transaction could be subject to both 206C (1H) | liable to deduct tax or failed to deduct tax | |
| When to Deposit/Collect | Tax deducted to be deposited by the 7th day of subsequent month | Tax collected to be deposited by the 7th day of subsequent month |
| Quarterly Statement to be Filed | 26Q | 27EQ |
| Certificate to be Issued | FORM 16A | FORM 27D |
Please note for TDS on Purchase Do not include GST for TDS calculation
Read in detail about TDS on Purchase of Goods and TCS on Sale of Goods
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In TCS we sale to a customer 6600000 but payment received only rs. 4800000 as on 30/04/2024 when we deduct TCS.