Indian Government Impossed 20% TCS on international credit card

Tax Collection at Source (TCS) is a mechanism implemented by tax authorities to collect tax revenue at the source of certain transactions. Under TCS, the person making the specified transaction collects tax from the buyer at the time of sale, and this tax amount is then remitted to the government.

Here are some key points to understand about Tax Collection at Source (TCS):

Applicability: TCS is applicable in various countries, including India, where it is governed by the Income Tax Act. It is levied on specific transactions, usually involving the sale of certain goods or services.
Collection Responsibility: The person responsible for collecting TCS is generally the seller or the person receiving payment for the sale. They are required to collect the tax amount from the buyer at the time of the transaction.
Tax Rate and Threshold: Each country or tax jurisdiction determines the applicable TCS rate, which is a percentage of the sale value. There is usually a threshold limit above which TCS is applicable. Transactions below the threshold may be exempt from TCS.
TCS Certificate: After collecting the tax, the seller provides a TCS certificate to the buyer as proof of tax collection. The certificate typically includes details such as the tax amount, seller’s information, buyer’s information, and transaction details.
Remittance and Reporting: The seller is responsible for remitting the collected TCS amount to the tax authorities within the specified timeframe. Additionally, they are required to report the TCS transactions and amounts in their tax returns or other prescribed forms.
Set-Off or Credit: The TCS amount collected by the seller is not an additional tax liability for the buyer. In most cases, the buyer can claim the TCS amount as a credit or set-off against their overall tax liability when filing their tax returns.
Purpose and Revenue Collection: TCS is primarily implemented to ensure tax compliance and enhance tax revenue collection by capturing tax at the point of sale itself. It helps in widening the tax base and preventing tax evasion in certain transactions.