Government relief to Income tax payers
Hemlata Khandenwal / 2020-05-21 12:08:45
What are TDS and TCS?
Before going to know about the Government relief to income taxpayer, the person should know about TDS and TCS. Tax deduction at source (TDS) and tax collection at source (TCS) are two ways to collect the tax. TDS means deduction at source. TCS stands for Tax Collection at Source. In both cases, there is a need to file a return. Many people do not understand the difference between these two.
What is TDS?
It is deducted from the source of your income i.e. your salary. TDS is only a part of income tax, which the taxpayer has already paid. Its settlement is made while filing the Income Tax Return (ITR). If the TDS deducted from your salary is more than your total tax liability, then it is returned to you through ITR filing. Overall, it is a process through which the government collects tax immediately. TDS deduction is included in your salary, interest on investment, professional fees, commission, and brokerage. Any institution (which comes under the purview of TDS) that is paying TDS deducts a certain amount as TDS.
Who gives TDS?
The paying person or institution (company) is responsible for filing TDS. These are called deductors. At the same time, the tax deductor is called the deductee. It is necessary to deposit the deducted amount in the form of TDS. Every deductor has to issue a TDS certificate and tell how much TDS he has deducted and submitted to the government.
What relief has given by the government to the income taxpayers?
Central government relief
The central government has given an economic package to boost the economy. Relief has been given in many cases. The income tax return date has been extended. At the same time, TDS and TCS are also exempted. The government has cut the tax deducted at source (TDS) and tax collection at source (TCS) rates by 25 percent on various types of commercial payments made within the country for the remaining period of the current financial year. This deduction will apply to all payments from May 14, whether it is commission, brokerage, or any other payment.
What is TCS?
Government give relief for the income taxpayers on TCS come to know about TCS,
TCS-Tax is collected at the source. It means tax collected at source (tax collected from income). TCS is paid by the seller, dealer, vendor, shopkeeper. However, he charges the buyer or customer while selling any item. After collection, the seller or shopkeeper must collect it. It is controlled under section 206C of the Income Tax Act. Only sellers of certain types of goods collect them. These items include timber wood, scrap, mineral, tendu leaves. This type of tax is deducted only when the payment exceeds a limit.
What is the difference between TDS and TCS?
TDS - Paying tax deducts money
TCS-Payer asks for money by adding tax
Ramesh sold a scrap of 1 lakh rupees to a firm. There is a rule of taking 1% TCS on scrap.
1 percent of 1 lakh will be 1000 rupees. Then a total of 1 lakh 1 thousand rupees will be taken from the firm.
The TCS of Rs 1000 has to be deposited with the Income Tax Department, in the name of the buyer firm.
For business purposes, TCS rules on cutting certain types of things.
List of some of the things TCS is purchased on and TCS rates on them.
1. Alcohol - 1%
2. Persimmon leaf - 5%
3. Timber wood - 2.5%
4. Coal / Iron / Lignite - 1%
5. On vehicles above 10 lakhs - 1%