What is the difference between TCS & TDS? - letsdiskuss
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What is the difference between TCS & TDS?


TDS: Tax Deduction at Source; In this process of tax is deducted by the person who is providing you INCOME.


TCS: Tax collection at Source; In this mechanism, tax is collected when you are acquiring SOURCE OF FUTURE INCOME for e.g., buying a coal mine or mountain for stone quarrying.


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TCS & TDS are terms related to income tax. It is one of the major sources of income for the government. But TCS & TDS does not come under the list of direct taxes. This tax is collected indirectly and that’s why it comes under the list of indirect taxes.  Although both taxes are levied at the point of origin of income. However, these two-term always confused the people who never have any about taxes. Don’t worry we have the solution for you in this article, we are discussing what is the difference between TCS & TDS. So, keep reading to learn more.




What Is TCS?

TCS (Tax Collected at Source) is imposed on goods and collected by sellers, the seller collects it from buyers at the time of sale.  As per Section 206C of the Income Tax Act, 1916 specifies that TCS is applicable to goods and services. The limit for TCS on the sales of goods is Rs. 500 lakhs.

What Is TDS?

TDS(Tax Deducted at Source). The income tax department mandate that any company or sole individual deduct tax at the source if the payment exceeds Rs. 50 lakhs for the purchase of any goods and services as per section194Q. The government predicted the rate of TDS under the Income Tax Act.





0.1% of the sum exceeding Rs, 50 lakhs

0.1% of the sum exceeding Rs, 50 lakh

Time of Deduction

At the time of sale.

Whenever a payment is due or made


Filing a quarterly statement

Only one quarterly return has to fill for TCS which is Form 27EQ.

There are three different returns to be filled for TDS which are the following: Form 24Q9 (on salaries), From 26Q (other than salaries), and Form 27Q (payments made to NRIs).

Due Date

It will be deducted during the month in which the supply is made.

TDS returns have to be submitted quarterly and the due date of depositing TDS is the 7th of every month

Person Responsible

It is collected by individuals selling specifics goods and service

It is deducted by the individual making the payment.

Unavailability of PAN

If the person doesn’t have Pan, the TCS will be collected at the following rate: a rate of 5%


Those persons don’t have the PAN to the person making the charged TDS at the following rate: rate of 20% and it is specified in the corresponding provision of the Act.



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