What is tax collected at source in SAP FI - Financial Accounting?

SAP Term: tax collected at source

• Component: FI

• Component Name: Financial Accounting

• Description: In India, a form of tax collected at source from the buyer by the sellerof prescribed items. It is commonly referred to as TCS.

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• Key Concepts: 
  Tax collected at source (TCS) is a type of tax that is collected by the seller from the buyer at the time of sale. It is a form of indirect tax that is collected by the seller and then deposited with the government. TCS is applicable to certain types of transactions, such as sales of goods or services, and is usually calculated as a percentage of the total sale amount. 
  
  How to use it: 
  In SAP Financial Accounting, TCS can be set up as a separate tax code in the system. This tax code can then be assigned to the relevant transactions in order to calculate and collect the TCS amount. The collected TCS amount can then be reported to the government in accordance with applicable laws and regulations. 
  
  Tips & Tricks: 
  It is important to ensure that the correct TCS rate is applied to each transaction in order to avoid any penalties or fines from the government. Additionally, it is important to keep track of all TCS payments made in order to ensure compliance with applicable laws and regulations. 
  
  Related Information: 
  TCS is similar to Value Added Tax (VAT) and Goods and Services Tax (GST). However, unlike VAT and GST, TCS is not a self-assessed tax and must be collected by the seller from the buyer at the time of sale. Additionally, TCS payments are reported directly to the government rather than being reported through a VAT or GST return.