Income Tax · 5 min read
TDS vs TCS — What's the Difference? (India, Explained Simply)
By the India Law Simplified editorial team · Verified against primary government sources (bare Acts & official portals) · Last updated 2026-06-10
TDS and TCS both collect tax at the transaction stage, but they work in opposite directions. Here is the difference, with simple examples.
1Quick verdict
TDS (Tax Deducted at Source) is deducted by the payer from a payment made to you (salary, rent, interest, professional fees). TCS (Tax Collected at Source) is collected by the seller from the buyer on certain sales (e.g. some goods, foreign remittances under LRS). Both are adjusted against your final tax.
2Who acts and when
- TDS: the person MAKING the payment deducts a percentage and deposits it against your PAN — e.g. an employer on salary, a tenant on high rent, a bank on interest.
- TCS: the SELLER collects an extra percentage from the buyer at the point of sale and deposits it — e.g. on certain goods or on foreign tour packages and LRS remittances.
- Both appear in your Form 26AS / AIS and can be claimed as credit when you file your ITR.
3Example
If you earn ₹1,00,000 in professional fees, the payer may deduct 10% TDS (₹10,000) and pay you ₹90,000 — the ₹10,000 is credited to you. If you buy a foreign tour package, the seller may add TCS on top, which you later adjust against your tax. Either way you reconcile it in your return.
Frequently asked questions
Can I get a refund of TDS or TCS?
Yes. If the total TDS/TCS credited to you exceeds your actual tax liability, you claim the excess as a refund by filing your income-tax return.
Where do I see my TDS and TCS?
Both show in your Form 26AS and the Annual Information Statement (AIS) on the income-tax portal. Reconcile them before filing your ITR.
Is this tax advice?
No. Rates and thresholds change. Confirm the current TDS/TCS provisions with a CA.
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Related guides
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Income-tax regime calculator · Form 16 → ITR computation
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