Definition
TCS (Tax Collected at Source)
TCS is tax collected by a seller from the buyer on certain transactions and remitted to the government, which the buyer can later claim as credit.
Tax Collected at Source (TCS) is the mirror image of TDS — instead of the payer deducting, the seller collects tax from the buyer at the point of sale on specified transactions. Common examples for individuals include foreign remittances under the Liberalised Remittance Scheme, overseas tour packages, and certain high-value purchases.
The TCS collected is deposited against your PAN and shows up in your Form 26AS and AIS. You can claim it as a credit against your total tax liability when filing, or adjust it against TDS on salary in some cases.
Because TCS on foreign spending has expanded in recent years, anyone sending money abroad for travel, education or investment should factor it into cash-flow planning, knowing it is recoverable at filing time.
Related terms
- Form 26ASForm 26AS is a consolidated annual tax statement showing all tax deducted, collected and paid against your PAN.
- Annual Information Statement (AIS)The AIS is a comprehensive statement of a taxpayer's financial transactions reported to the tax department, used to help file accurate returns.
- TDSTax Deducted at Source is tax withheld by the payer and deposited with the government on your behalf.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.