Some queries on TCS 206C - Reg

[krishna besta]

Sir,

Please clarify some of doubts on TCS 206C

1. In our company we have practice of receiving advances for scrap sales, Can we deduct TCS at the time        of receiving advance or should we deduct it at the time of raising invoice. pl clarify?

      *Problem faced *:  a)Suppose we have received advance Rs.50000 tw scrap sales and tcs deducted at 1% for Rs.500 and paid.
                                Later invoiced booked only for Rs.30000, we are not sure of booking of bal 20000 in future.
                               Kindly suggest


b) Reg late payment of TCS: Suppose the TCS is paid belatedly, what is the @ of interest to be paid for the delayed period. Is it same as applicable to TDS at 1.5% pm or part thereof   OR any diff rate . pl clarify?

c)  Can we deduct TCS at the time of raising invoice , though advances are received initially? Is this practice viableas per the provisions of  Income Tax Act, 1961

Kindly suggest. Waiting for ur reply...

[Rama Krishana]

The concept of TDS is whichever is earlier. The payment received or invoice raised whichever is earlier is the taxing point for TCS. 

For non collection of TCS or belated payment TCS, rate of interest is 1% for each month or part of the month.

See section 206C for more details.

AI Summary

TCS timing: collect tax at the earlier of receipt or invoice; interest applies for belated payment. Timing of TCS is the earlier of receipt of payment (including advances) or issuance of the invoice; TCS may therefore be collected on receipt of advance. Interest is chargeable for delayed or belated payment at the prescribed monthly rate for each month or part thereof. Compliance should follow the statutory TCS provisions and the earlier-of-receipt-or-invoice rule.