TDS/TCS SERVICE
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.
| 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 | |||
| TYPES | DATES |
|---|---|
| Payments of TDS Collected | On before 7thh of every month |
| TDS Return | On before 31th of next month after quarter-end |
| TYPES OF DELAY | PENALTY RATES |
|---|---|
| Late deduction | 1% per Month |
| Late Payment | 1.5% per Month |
| Late Filling | Rs 200 per Month |
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