Glossary · Income Tax
TCS
Tax collected by the seller from the buyer at the time of sale on specified goods and transactions under Section 206C of the Income Tax Act.
TCS (Tax Collected at Source) is collected by a seller at the time of sale of certain notified goods (for example scrap, minerals, forest produce and high-value motor vehicles) and on specific transactions such as overseas tour-programme payments and certain foreign remittances. The seller deposits the collected amount with the government, and the buyer can claim credit against their final tax liability. The applicable rate and coverage depend on the nature of the transaction as notified under the law.
Examples
A trader selling motor vehicles above the notified value threshold collects TCS from the buyer; the amount then appears in the buyer’s tax credit statement.