TDS and TCS under GST is an acronym for tax deduction at source and tax collection at source. These terms are even present under the Income Tax law. TDS and TCS under GST came into effect from 1st October 2018. TDS refers to the tax which is deducted when the buyer of goods or services, such as government departments, makes payments under a business contract. On the other hand, TCS refers to the tax which is collected by the electronic commerce operator when a seller supplies some goods or services through its website and the payment for that supply is collected by the electronic commerce operator.

The tax would be deducted @1% of the payment made to the supplier (the deductee) of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh fifty thousand rupees (excluding the amount of Central tax, State tax, Union Territory tax, Integrated tax and cess indicated in the invoice). Thus, individual supplies may be less than Rs. 2,50,000/-, but if contract value is more than Rs. 2,50,000/-, TDS will have to be deducted. However, no deduction shall be made if the location of the supplier and the place of supply is in a State or Union territory, which is different from the State, or as the case may be, Union Territory of registration of the recipient.

Government departments to deduct TDS:

The CGST Act specified the following Government departments empowered to deduct tax at source section 51(1) of the Act

A department or establishment of the central Government or state Government

local authority

Governmental agencies

Such person or category of persons as may be notified by Central or State Governments on the recommendation of the GST Council.

TDS - Tax Deducted at source

T.D.. Rates
Section Code Nature of Payment Threshold limit
(in Rs.)
TDS Rate
indv / HUF |Others
194 C A Payment to Contactor / Sub Contractor
(30,000) per Contract or Rs1,00,000 for agrregate amount during the year)
30,000(single bill)/100,000 p.a. 1% 2%
194 D Insurance Commission 15,000 p.a. 5% 10%
1941 Rent-Land or Building or Furniture & Fixtures 2,40,000 p.a. 10% 10%
1941 Rent / Plant & Machinery 2,40,000 p.a. 2% 2%
1941 Technical Fee / Professional Fee 30,000 10% 10%
192 Salaries Slab Rate

Due dates

Payments of TDS Collected On before 7thh of every month
TDS Return On before 31th of next month after quarter-end


Late deduction 1% per Month
Late Payment 1.5% per Month
Late Filling Rs 200 per Month


Can We Help You?

At N K Legal Consultants offer a full suite of bespoke, confidential coaching and consulting services

(+91) 8954141101


Shop No - 9 Zila Parishad Khotwali. Churaha Etawah (206001)

Get Free Legal Consultant : (+91) 8954141101