what is tcs tax
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While taking the price of the goods, tax money is also added to it and deposited with the government. It is the responsibility of the person who sells the goods to collect TCS from the buyer and deposit it with the government. Means it is the responsibility of the seller. Due to collecting tax from the source of getting the price, it is called Tax Collected at the Source i.e. TCS. According to Section 206C (1) of the Income Tax Act, there is a rule to deduct TCS only on the sale of certain items for business purposes. From July 1, 20 per cent TCS will be levied on foreign tour packages and money sent abroad under the Liberalized Remittance Scheme (LRS).
Purchase of five lakhs, bill of six lakhs
If you pay five lakh rupees through credit card while traveling abroad, then your credit card bill will be six lakh rupees. The credit card company will charge you 20% extra and deposit it with the government as TCS. TCS will be levied on all types of transactions abroad through credit cards. If you buy from foreign websites and want to get these goods delivered in India, then you will have to pay TCS on this. If you pay for subscription to any app or service through non-India gateways, you will have to pay TCS. You can claim it while filing returns.
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