TCS on sales if payment received in next financial year, Income Tax

Dear Sir,

Most of the people are charging TCS on Sales in the Sales Invoice. TCS on Sales is based on payment collection. If Sales happens in say March 2021 wherein TCS is charged in the invoice and payment is done say in May, how is TCS on Sales collected in such case?

Since TCS is already charged in invoice in March, it will need to be paid. Also since TCS is based on collection, again compliance issue might come as TCS again becomes payable.

26AS will also become complicated as party to party different systems are followed as some charge TCS on collection and some in the invoice

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Showing Replies 1 to 5 of 5 Records

1 Dated: 10-1-2021 By:- Ganeshan Kalyani

Sir, in my view, TCS is payable at the time of receipt of payment. The convenient way adopted by some taxpayer is to charge TCS on sale invoice. However, department will demand the tax only as per law. So, a reconciliation is a must to prove correct tax has been paid.

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2 Dated: 11-1-2021 By:- DR.MARIAPPAN GOVINDARAJAN

Whether TCS, in your query, is in relation to Income Tax Act or GST Act?

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3 Dated: 12-1-2021 By:- Ashish Gupta

I am asking in relation to Income Tax

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4 Dated: 12-1-2021 By:- DR.MARIAPPAN GOVINDARAJAN

Ok I will revert

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5 Dated: 12-1-2021 By:- DR.MARIAPPAN GOVINDARAJAN

In my view as Ganesan said it should be paid on collection of bill only. So you have to pay only on May.

whether you have paid the tax on March itself?

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