TDS, Tax deduction at source means the tax required to be paid by the assesses, is deducted by the person paying the income to him. Thus, the tax is deducted at the source of income itself.Tax Deducted at Source (TDS) is a means of collecting income tax in India, governed under the Indian Income Tax Act of 1961. It is managed by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue managed by Indian Revenue Service (IRS).It has a great importance while conducting Tax Audits. TDS is based on the principle of ''pay as and when you earn''.TDS is a win-win scenario for both the taxpayers and the government. Tax is deducted when making payments through cash, credit or cheque, which is then deposited with the central agencies.
Tax Collected at Source is known as TCS. It means tax being collected from the source by the seller (collector) from the buyer (Collectee/payee) for goods traded under section 206C(1) of Income Tax Act, 1961. TCS is collected when acquired or when paid whichever is earlier. Tax collected at source is applicable to any business or trade dealing with alcoholic liquor, forest produce, scrap, etc. It also includes lease, license, or contract related to parking lots, toll plaza, mines, and quarry, etc as defined in section 206C of Income Tax Act, 1961. For TDS and TCS registration one has to make an application for TAN (Tax Deduction Account Number ).Click Herehttp://www.myfinconsultants.com/PAN_and_TAN.php
For any tax deducted or collected at source on certain payments, on or after 1st April 2010, a quarterly TDS/TCS statement is required to be submitted.The Form in which these quarterly returns have to be submitted is specific to the nature of deduction.