Tax Collected at Source (TCS) is a system implemented by the Indian government to collect taxes at the source of certain transactions. Here are the key points to understand about TCS:

• TCS is applicable to specified transactions such as sale of goods, provision of services, and receiving payments exceeding a threshold specified by the government.
• It is collected by the seller or service provider at the time of transaction and deposited to the government.
• TCS is levied at a specific rate determined by the government. It varies based on the nature of the transaction.
• Individuals, partnership firms, companies, and other entities are required to collect TCS if their transaction falls under the specified category.
• The collected TCS is reflected in the seller's or service provider's TCS certificate, which is issued to the buyer or recipient of services.
• Buyers or recipients of services can claim credit for the TCS collected while filing their income tax returns, thereby offsetting their tax liability.
• Non-compliance with TCS rules and requirements can result in penalty and prosecution under the Income Tax Act.

Overall, Tax Collected at Source (TCS) ensures that tax is collected at the time of transaction, helping in the smooth flow of revenue for the government.