Tax Deducted at Source/Tax Collected at Source

Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) are parts of India’s direct tax system. They ensure taxes are collected at the time of payment or receipt, making transactions traceable and reducing tax evasion.

• TDS applies when you make payments like salary, rent, professional fees, or interest — you deduct tax before paying.
• TCS applies when you sell goods above certain limits — you collect tax from the buyer at the time of sale.

These rules are governed by the Income Tax Act, and every business must comply to avoid penalties and maintain credibility.