„Tax Collection at Source‟ (TCS) is one of the methods for tax collection by the government. It follows the principle „You pay while you earn‟. While „Tax Deducted at Source‟ (TDS) requires the payer to deduct tax at source and remit the tax to the government, TCS requires the receiver/seller to collect tax at source and remit it to the government. The purpose of this provision is to eliminate tax evasion in certain trades.

Create Sales Invoice with TCS

Go to Sales Invoice

Click on new button and create sales invoice

Select Customer Name, Enter Posting Date on the General Tab

Go to the Sales Line à Select Type = Item, Account No. = Select Item Code Enter Unit Price, Select TCS Nature of Collection

Click on Statistic button and check TCS & GST Values.

Click on posting à Post

Invoice is posted, click on YES button and check posted invoice.

Click on Invoice à Find entries

Check Accounting entries

Calculate TCS in Advance Receipt

Go to Bank Receipt Voucher à Select Batch

Enter Posting Date, Document Type = Payment, Account Type = Customer, Account No. = Select Customer Code, Enter Amount with negative sign, Bal. Account Type = Bank Account, Bal. Account No. = Select Bank Account Code, Select TAN No., Select TCS Nature of Collection

Click on Preview Posting and check Accounting entries.

System generated TCS entry as shown in the below screen.

Click on Post button à Post Bank Receipt Voucher

TCS Payment to Government

Go to Bank Payment Voucher à Select Batch

Enter Posting Date, Document Type = Payment, Account Type = G/L Account, Account No. = Select TCS Payable A/c, Bal. Account Type = Bank Account, Bal. Account No. = Select Bank Account Code, Select TCAN No.

Click on Related à Tax Payments à TCS

Click on Pay TCS

System will update TCS Amount in the Bank Payment Voucher

Click on Post/Print à Click on Post button to post Bank Payment entry.