Assist the company in tax accounting, withholding tax lawsuits and in collecting proof from the tax authority regarding taxes withheld under account. Submit a quarterly return in order to avoid fines
Deduction of Tax at Source (TDS) and Tax Collected at Source (TCS) are mechanisms employed by tax authorities to ensure timely tax collection.
Deduction of Tax at Source (TDS)
TDS is a process where a person making a payment deducts a specified portion of the payment as tax and remits it to the government. The remaining amount is then paid to the recipient (.
Key Features of TDS
- Deductor: The entity making the payment and responsible for deducting the tax.
- Deductee: The recipient of the payment from whom the tax is deducted.
- Tax Rate: Determined by the nature of the payment and the income tax laws.
- Compliance: Deductor must issue a TDS certificate to the deductee and file a TDS return with the tax authorities.
Common Examples of TDS:
- Salary income
- Interest income
- Rent payments
- Professional fees
- Contract payments
Tax Collected at Source (TCS)
TCS is similar to TDS but applies to specific transactions, primarily related to the sale of goods or services. The seller (collector) collects a specified tax amount from the buyer and remits it to the government.