Credit of TCS AY 2026-27
Credit for tax collected at source (TCS) is allowed to the person from whom it is collected, provided the collector deposits the tax with the Central Government and files the TCS Statement.
Who Can Claim Credit?
- Collectee: Credit is allowed to the person from whom TCS is collected and deposited.
- Other Persons(from 01-01-2025): Credit can be transferred to another person if:
o The income of the collectee is assessable in the other person’s hands under the Income-tax Act.
o The collectee files a declaration with the collector specifying details of such other person and reason for giving credit.
o The collector reports this in the TCS statement and issues a TCS certificate in the other person’s name.
When Is Tax Credit Allowed?
- Credit is given in the assessment year when the corresponding income is assessable.
- For certain cases (e.g., TCS on motor vehicles, overseas remittances, tour packages, and sale of goods), credit is allowed in the year of collection.
Conditions for Allowing Credit
Credit is allowed if:
- The collector deposits the TCS with the Central Government.
- The collector files the TCS Statement, reporting the tax collected.
Verification of Credit