Calculation of TCS as per the Income Tax Act, 1961 and GST on sales transactions
This article describes a sales invoice that includes GST and TCS under the Income Tax Act, 1961. This TCS uses TCS Nature of Collection. It's separate from GST TCS on cash or bank vouchers.
The process of calculation of TCS and GST has been explained in this document.
Create a sales invoice
- [!INCLUDE [open-search](../../includes/open-search.md)] Enter Sales Invoices, and then choose the related link.
- Select Customer on Sales Invoice header.
- Select Item on Sales Invoice line. GST Group Code, HSN/SAC Code shouldn't be blank on the Item.
- Select TCS Nature of Collection on the sales line. The nature of collection must be allowed for the customer and must not be configured as TCS on Recpt. Of Pmt.
For example, there's a sales invoice for INR 10,000 and 18% GST (that is, 9% CGST and 9% SGST/UTGST in case of Intra-State or Intra-Union Territory transaction or 18% IGST in case of Inter-State transaction) and 1% TCS as per Income Tax Act, 1961 has to be charged on the invoice amount.
The example assumes a TCS base that excludes GST. Confirm the configured TCS base, thresholds, and rates for your transaction; the example rates aren't current-rate guidance.
GST calculation appears in the Fact Box as following:
Component Amount GST Base Amount 10,000 CGST 900 SGST 900 TCS 100 On posting of sales invoice, GL Entries are as following:
Particulars Amount Customer Account 11900 SGST/UTGST Payable Account -900 CGST Payable Account -900 TCS Payable Account -100 Sales Account -10000
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In case of Inter-State Sales, IGST is calculated with TCS as per the Income Tax Act, 1961.