In order to generate revenue, The Govt of India collects both Direct and Indirect Taxes. Direct Tax is the tax that is applicable on the income of the assessee and Indirect tax is applicable on the sale of goods & services. TDS stands for Tax Deducted at Source & TCS stands for Tax Collected at Source. Difference between TDS & TCS is summarized in a table below:
| Basis | Tax Deducted at Source (TDS) | Tax Collected at Source (TCS) |
| Definition | TDS is the tax deducted by the payer of Income, if the income exceeds the threshold limit. | TCS is the tax collected by seller when selling the goods. |
| Applicability | TDS deduction is applicable on Rental Expense, Salary, Professional Fees, Payment to contractor, Interest payment, etc. | TCS is collected on Sale of Goods, Remittance made under LRS and overseas tour package. |
| Scope | TDS needs to be deducted if the Expenses exceeds the specified threshold limit. | TCS needs to be collected on sale of goods governed by Sec 206C. |
| Responsibility | Deducted by Payer or buyer. | Deducted by Payee or seller |
| Due Date of Deposit | 7th of the month succeeding the month in which TCS is collected | 7th of the month succeeding the month in which TCS is collected |
| Interest on Late Payment | 1.5% Per month from the date at which TDS was deducted to the actual date of deposit | 1% per Month or part of month |
| Return Form | 24Q and 26Q | 27EQ |
| Due date of Return | Apr-Jun- 31st Jul Jul-Sep- 31st Oct Oct-Dec- 31st Jan Jan-Mar-31st May | Apr-Jun- 15th Jul Jul-Sep- 15th Oct Oct-Dec- 15th Jan Jan-Mar- 15th May |
| Late fees | As per Section 234E, every person fails to file TDS return will required to pay late fees of Rs. 200 per day during which failure continues. | As per Section 234E, Every person fails to file TDS return will required to pay late fees of Rs. 200 per day during which failure continues. |
| Sections | 192B, 194C, 194J, 194A, 194H, 194I , etc | 206C |
| TDS certificate form | Form 16 or 16A | Form 27D |
