TCS (Tax Collected at Source)
Tax that a seller collects from the buyer at the time of sale for specified goods or transactions, over and above the sale price, and deposits with the government.
TCS works in the mirror direction of TDS: instead of a payer deducting tax before paying, a seller collects an additional amount from the buyer at the time of sale and deposits it with the government. It applies to specific categories, such as sale of certain goods above value thresholds, overseas remittances under the Liberalised Remittance Scheme above specified limits, and overseas tour packages, among others.
Like TDS, the amount collected as TCS isn't a final extra cost: it shows up as a credit in the buyer's Form 26AS and can be claimed against their total tax liability when they file their return. It's most commonly encountered by individuals through large foreign remittances or high-value purchases of specified goods.
This glossary entry is for general informational purposes only and does not constitute professional tax, legal, or financial advice. Rules and rates change, so consult a qualified Chartered Accountant for advice specific to your situation.