With the upgrading status of our society and lifestyle Government of India is also updating their policies and ammendments to keep a check on every citizen.
As tax department plays a very big role in upgradation of our country
let’s talk about three upgradation namely TDS, TCS and TAN.
Tax Deduction at Source(TDS)
Tax deduction at source means the tax 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.
Income from following source is subjected to TDS:
→ Interest on securities.
→Salary and all other positive incomes under any head of income.
→Payments to contractors.
→Winnings from Lottery and Horse Races.
→Income from units purchased in foreign currency.
→Payments of any income to non-residents in respect of interest or dividend on bonds and shares.
→Payments of fees or technical services.
→Payment of rent and for commission.
Tax Collection at Source(TCS)
Tax collection at source arises on the part of the seller of goods.
Here, tax is collected at the source of income itself.It is to be
collected at the source from the buyer, by the seller at the point of
sale.
The following goods when sold must be subjected to TCS:
→Alcoholic Liquor for human consumption.
→Timber obtained under a forest lease.
→Timber obtained by any mode other than a forest lease.
→Any other forest produce not being timber.
Tax Deduction and Collection Account Number(TAN)
TAN is a 10 digit alpha numeric number required to be
obtained by all persons who are responsible for deducting or collecting
tax. TAN is alloted by the Income Tax Department on the basis of
application submitted to TIN Facilitation Centres managed by National
Securities Depository Limited (NSDL). The income tax act makes it
mandatory for TAN to be quoted in all TDS/TCS returns and payment
challans.
