New Delhi: In another step to provide relief to crores of taxpayers in the country, the Central Government is all set to merge Tax collected at Source (TCS) with Tax Deducted at Source (TDS) on income paid by an individual. Chief Economic Advisor (CEA) Ananth Nageswaran said the objective is not to affect the cash flow of individual taxpayers. Note that a 20% TCS tax will be applicable from July 1 on spending above a certain limit abroad. The CEA, while supporting the government’s decision, said that TCS will be added to your TDS in such a way that if you have paid TCS, it will show less TDS. Industry body CII said in a program that the new system will provide relief to those taxpayers who are troubled by the difference between TCS and TDS. TCS is the tax levied by the seller at the time of the sale of goods or services, while TDS is the tax levied by the government.
Information provided by financial advisors
Chief Economic Advisor (CEA) Ananth Nageswaran said the government had excluded transactions up to Rs 7 lakh from TCS, which will provide relief to small taxpayers. That is, most transactions will not come under the purview of 20% TCS.
Tax on foreign expenses
The 20% TCS rule on international credit card spending will come into effect from July 1 and after facing criticism, the finance ministry exempted spending up to Rs 7 lakh from the purview of TCS. The ITR filing date is coming closer. In such a situation, many people seem confused about TDS and TCS. Note that these are two different methods of tax collection, TDS stands for tax deducted at source, while TCS stands for tax collected at source. In both cases, money is removed from the money transaction. Although this money is deposited with the government, there is a big difference in the way of tax payment of both.
