Can taxpayers use TCS to meet their advance tax obligations?

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An individual is generally liable to pay advance tax, when their total tax liability for the financial year exceeds Rs 10,000 after deducting TDS and TCS, except in certain specified cases.

The Finance Act (No. 2) of 2024 has vide section 192(2B) of the Income Tax Act enabled employers to give credit of any TCS in case of an employee, which is deducted and reported by such an employee in the manner specified under Rule 26B. (Image: Freepik)

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Question: In which document can an individual verify if TCS (Tax Collected at Source) has been deducted? Is TCS treated the same as advance tax? Can an individual meet their advance tax obligation using TCS? If yes, how?

Answer given by CA (Dr.) Suresh Surana: Form 26AS, the Annual Information Statement (AIS), and the Tax Information Statement (TIS) provide details of the Income Tax paid through TCS. Taxpayers can access these documents by logging into the Income Tax portal.

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Additionally, as per Rule 37D of the Income Tax Rules, the collector is required to issue a certificate in Form 27D to the collectee within 15 days from the due date of furnishing the TCS statement.

Further, the Finance Act (No. 2) of 2024 has vide section 192(2B) of the Income Tax Act enabled employers to give credit of any TCS in case of an employee, which is deducted and reported by such an employee in the manner specified under Rule 26B.

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An individual is generally liable to pay advance tax, when their total tax liability for the financial year exceeds Rs 10,000 after deducting TDS (Tax Deducted at Source) and TCS (Tax Collected at Source), except in certain specified cases (such as, exemption to senior citizen above 60 years and not having income from business / profession).

An individual can use the TCS collected to meet their advance tax obligations. When calculating advance tax liability, the taxpayer can deduct the amount of TCS already collected and paid on their behalf from the total advance tax due.

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However, for most salaried taxpayers who only have salary as their source of income, there may be no separate advance tax liability, as employers usually deduct taxes from their salary.

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