Accounting Effects

Sales
Customer A/C (i.e Debtors) Dr Debited
Sales A/C Cr Credited

Receipt Of Sales
Customer A/C (i.e Debtors) Cr Credited
Cash/Bank A/C Dr Debited

Purchase
Supplier A/C (i.e Creditors) Cr Credited
Purchase A/C Dr Debited

Payment Of Purchase
Supplier A/C (i.e Creditors) Dr Debited
Cash/Bank A/C Cr Credited

TDS Tax Deduction At Source

TDS is deducted by Employer or Buyer of any particulars. The tax is paid to government (i.e in authorized bank) by them on behalf of seeller or employee. As a proof of the deduction employer is giving a copy of Form 16 to employee and buyer is giving a copy of Form 16A to seller so that he can submit it to government body.

Tax Collection At Source (TCS)

TCS is deducted by seller from buyer. For example one buyer buys an item costing Rs.1000/- and seller giving bill of Rs.1100/- as Rs.1000/- item price + Rs.100/- i.e 10% tax on that item.