Frequently Asked Questions TDC/TCS Return
TDS stands for Tax Deducted at Source. It is a method of collecting income tax by deducting a certain percentage of payment at the time it is made, such as salary, interest, commission, rent, etc.
Any individual, business, or organization making specified payments (like salaries, contractor fees, rent, interest, professional fees, etc.) above a threshold limit must deduct TDS if they are liable to get audited under the Income Tax Act.
Section — Nature of Payment — TDS Rate
192 — Salary — As per slab
194A — Interest (non-bank) — 10%
194C — Contractors — 1% (individual)/2% (company)
194H — Commission/Brokerage — 5%
194I — Rent — 2% (plant) / 10% (building)
194J — Professional Fees — 10%
TDS must be deposited to the government:
• By the 7th of the following month in which deduction is made.
• For March, due date is 30th April.
TDS must be deposited online using Challan ITNS-281 through:
• Income Tax portal,
• Authorised bank website.
These are quarterly TDS return forms:
• 24Q: TDS on salaries
• 26Q: TDS on domestic payments (non-salary)
• 27Q: TDS on payments to non-residents
Yes. Any person deducting TDS must obtain a TAN (Tax Deduction Account Number).
Quarter — Due Date
Q1 (Apr–Jun) — 31st July
Q2 (Jul–Sep) — 31st Oct
Q3 (Oct–Dec) — 31st Jan
Q4 (Jan–Mar) — 31st May
• Form 16: TDS certificate issued for salary payments (u/s 192).
• Form 16A: TDS certificate issued for non-salary payments like interest, rent, commission, etc.
• Interest @1% per month (non-deduction) and 1.5% per month (non-payment).
• Penalty under Section 271C.
• Disallowance of expense in computation of taxable income.
TCS stands for Tax Collected at Source, which is collected by a seller from the buyer at the time of sale of specified goods.
Sellers of specified goods must collect TCS. These include:
• Alcoholic liquor
• Tendu leaves
• Forest produce
• Scrap
• Minerals
• Sale of goods exceeding ₹50 lakh (Section 206C(1H))
• TCS is 0.1% on sale consideration exceeding ₹50 lakh in a financial year.
• If PAN not provided: TCS @ 1%
TCS collected must be deposited to the government by the 7th of the following month.
Yes. Like TDS, a TAN is also mandatory for TCS collectors.
Form 27EQ is used for quarterly filing of TCS returns.
Same as TDS returns:
• Q1: 31st July
• Q2: 31st October
• Q3: 31st January
• Q4: 31st May
It is the TCS certificate issued by the seller to the buyer for tax collected at source.
• Interest @1% per month
• Penalty under Section 271CA
• Prosecution in severe cases
Yes. Buyers can claim credit for TCS while filing their income tax return. It reflects in Form 26AS.
• TDS: Deduct at 20%
• TCS: Collect at 5% or higher depending on the nature of transaction
Yes. Under Section 206C(1G), TCS applies on:
• Foreign tour packages: 5%
• Foreign remittance under LRS: 5% to 20% (depending on nature and amount)