TDS is actually a deduction while TCS is a collection of
tax at source, meaning thereby, if X makes payment of Rs.
100 to Y and such payment is covered under the provisions
of tds, then X will have to deduct tds say Rs. 10 and then
will make payment of Rs. 90 to Y.
While, if X sells goods worth Rs. 100 to Y and such goods
are covered under the provisions of tcs, then X will
collect Rs. 10 more from Y and hence the sale will be for
In both the cases Rs. 10 will be deposited to govt. account.
Hope it will clarify the provision a little clear.
tcs means tax collection at source which is quite different
from tds.tcs is made when the invoice of
scrap,timber,alcoholic liquor for human consumption,tender
leaves and forest produce other than timber and tendu leaves
are raised.tcs is a tax collected from buyer of those
spcifeid goods under section 206c(1) in the concept of tcs.
rate of tax of tcs is different from one item to other,the
rates are as follows,
alcoholic liquor & scrap and waste- 1%
timber and forest produce other than timber and tendu
there is also a surcharge of 10% on the rate of tcs given above.
ed.cess & she cess @ 2%+1% on the basic surcharge.
TCS is exempted for buyer if he used these goods in
reproduction or manufacturing he has to submitted form 27c
to the seller.
on the other hand tds is tax deducted at source, which is
deducted from payments to contactors, salary