The Income Tax Act, 1961
states that businesses in India need to timely file their taxes and obtain their TAN (Tax Account Number). This number needs to be mentioned in TDS/ TCS return, challan and certificates (including e-TDS/ TCS)
TDS (Tax Deducted at Source
) is aimed to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount based on Form 26AS or the TDS certificate issued by the deductor. On the other hand, TCS (Tax Collected at Source
) refers to the tax payable by a seller, which he collects from the buyer at the time of sale. Section 206C of the Income-tax act governs the goods on which the seller has to collect tax from the purchasers. SMBs can enjoy several benefits
by timely filing their taxes.
Another tax law to be aware of is the recently introduced GST (Goods and Services Tax, 2017
). As per Government of India regulation, if the annual turnover of your business exceeds the set turnover limit under the GST rule (INR 40 lakhs for normal category states and INR 20 lakhs for special category states), you need to mandatorily register for GST. To know more about the eligibility criteria for GST registration, click here
. However, this tax is not applicable if you deal in goods or services listed under the GST-exempted category. Click here
to know all about GST and GST registration in India.