GlossaryTax Collected at Source

TCS

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Tax that a seller or marketplace collects from the buyer, or from the seller's payout, and deposits with the government.

TCS works the other way round from TDS: the party receiving money collects the tax. There are two kinds an Indian business meets.

Under income tax

Sellers of certain goods collect TCS from buyers. As of October 2026 these include alcoholic liquor for human consumption, tendu leaves, forest produce, scrap, some minerals, and motor vehicles above ₹10 lakh, along with foreign remittances and overseas tour packages. The general TCS on sale of goods above ₹50 lakh was removed from 1 April 2025. The buyer claims the amount against its own tax.

Under GST

E-commerce operators collect TCS on the net taxable sales made through their platforms, at 0.5% (0.25% CGST and 0.25% SGST, or 0.5% IGST) since 10 July 2024. They report it in GSTR-8, and the seller sees it in its cash ledger, where it can be used to pay GST.

What this means for an online seller

A brand selling ₹10 lakh a month on a marketplace has ₹5,000 collected as GST TCS. Reconciling the marketplace's payout statement with your own sales, and checking the TCS has arrived in your ledger, is part of each month's close.

Nearby terms

All 60 terms

SGSTThe state government's share of GST on a sale within that state, charged in equal measure with CGST.Stock valuationPutting a money value on the goods on hand at a date, usually at the lower of cost and net realisable value.Tax invoiceThe invoice a GST-registered business issues for a taxable sale, with the details the law requires.TDSTax that the payer cuts from certain payments and deposits with the government on behalf of the person being paid.Three-way matchChecking a supplier's bill against the purchase order and the goods received before it is paid.UdhaarGoods or services given on credit, to be paid later, as recorded in a shop's khata or a trader's book.

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