Tax Deduction at Source is a means of collecting tax on income, dividends or asset sales, by requiring the payer to deduct tax due before paying the balance to the payee. Income Tax must be deducted at source as per the provisions of the Income Tax Act, 1961.
Tax Collected at Source (TCS):
Tax Collection at Source is an additional amount collected as tax by a seller of specified goods from the buyer at the time of sale over and above the sale amount and is remitted to the government account.
As per Income Tax Act, 1961, all corporate and government deductors/collectors are compulsorily required to file their TDS/TCS returns on electronic media (i.e. e-TDS/TCS returns). However, deductors/collectors other than corporate/government can file either in physical or in electronic form.
£ Electronic mode: E-Payment is mandatory for
F All corporate assesses; and
F All assesses (other than company) to who provisions of section 44AB of the Income Tax Act, 1961 are applicable.
£ Physical Mode: By furnishing the Challan 281 in the authorized bank branch.
TDS/TCS Claim in ITR Filing:
If TDS or TCS has been deducted on any income during a financial year, then the same is claimed for credit while filing Income Tax Return for that financial year in which TDS or TCS is deducted.
In case you forgot to claim the TDS/TCS credit, the same will not be taken into account while calculating tax liability for that particular financial year and the amount will not be carried forward for the next year.