With reference to the taxation consider the following statements Tax Deducted at Source TDS is the t...........

Economic Affairs Tax System

With reference to the taxation, consider the following statements

Tax Deducted at Source (TDS) is the tax amount that the government collects directly from the recipient’s income immediately when it is earned.
Tax Collected at Source (TCS) is the tax collected by the seller during the time of sale.

Select the correct statement.

1 only

2 only

Both

None

Both Statements 1 and 2 are correct.
Tax Deducted at Source (TDS)

As per Income Tax Act, 1961, any individual or entity shall deduct tax at source at the time of payment for the purchase of goods (e.g., real estate) or services (e.g., salary, rent, professional fees, contractual expenses, royalty, technical assistance, etc.) or interest (e.g., interest on fixed deposit), if the payment amount breaches a pre-notified threshold amount. This is TDS or Tax Deducted at Source.
Where TDS is applicable, the individual or entity deducting tax is known as the deductor, while the individual or entity receiving the payment is known as the deductee.
With the TDS system in place, the tax on income gets collected in advance during a financial year rather than at the end of a financial year when the recipient files income tax returns.

Tax Collected at Source (TCS)

It is a tax collected by the seller at the time of sale of specified goods to a buyer.
Section 206C (1H) of the Income Tax Act, 1961 stipulates the goods and services applicable to TCS.
As per this section, a seller whose turnover is above Rs 10 crore should collect tax when he/she receives more than Rs 50 lakh from one buyer during a financial year.
Please note that TCS should be collected at the time of receipt of the sale amount.
However, if the buyer has deducted tax as per any other provisions of the Income Tax Act, 1961 on the goods purchased by him/her from the seller, then the seller is not required to collect tax on such dealings. This denotes TCS or Tax Collected at Source.

The sale of goods does not cover:

Export of goods such as tendu leaves, forest produce, alcohol, and scrap – under Section 206C (1)

Export of motor vehicles – under Section 206C (1F)
Foreign remittance – under Section 206C (1G)
TCS is not required to be deducted if the buyer is a Central Government employee, State Government employee, employee at High Commission, Embassy, Local Authority, Consulate, etc. This provision also does not apply to imports.

Hence option 3rd is correct.