Surcharge , CESS, Tax Deduction at Source (TDS), Withholding Tax, TAX Collection at Source,

 

Surcharge:

• Surcharge is tax on tax .
• Surcharge is charged on the paid income tax and not on the taxable income
• Surcharge is normally paid by the taxpayers, who fall in a particular tax bracket. 
• Eg. Say you have an income of Rs 100, on which you have to pay Rs 30 as tax. So the surcharge will be 10% on the 30 rupees tax that you have to pay, i.e. Rs 3. 

CESS: 

• Cess is a form of tax which is an additional levy by the Central Government to raise funds for a specific purpose like education cess.
• Cess is imposed only when there is a need to meet the exclusive expenditure for public welfare.
• In India, GST compensation cess and Education Cess are examples of cess.

Tax Deduction at Source (TDS) /Withholding Tax:

• Tax Deduction at Source (TDS) is the tax which is deducted on a payment made by a company to an individual, 
• Tax Deduction at Source (TDS) is applicable when the payment amount exceeds a certain limit fixed by the Government.

Withholding Tax:

• Tax Deduction at Source (TDS) when deducted from the income of NRI is said to be Withholding tax.
• Nature of Tax Deduction at Source (TDS) and Withholding taxes are  similar, Tax Deduction at Source (TDS) becomes Withholding when applicable to NRI.

TAX Collection at Source (TCS):

• TAX Collection at Source (TCS) is the tax that some specified sellers are required to collect from their buyers on exceptional transactions.
• TAX Collection at Source (TCS) is not applicable to every items of use rather on the sale of specific goods.

Tax Deduction at Source (TDS) /Withholding Tax vs TAX  Collection at Source (TCS):

• Tax Deduction at Source (TDS) deduction is applicable on payments such as salaries, rent, professional fee, brokerage, commission, etc. 
• TAX  Collection at Source (TCS) deduction is applicable on sales of specific goods like timber, scrap, mineral wood, and Motor vehicles exceeding Rs. 10 lakhs .
• Tax Deduction at Source (TDS) is applicable only on payments that exceed a certain amount and is collected by the seller as a means to track buyers and minimize tax evasion.
• TDS is direct tax and is deposited by deductor on the behalf of deductee while deductee can claim as income tax paid at the time ITR filing.