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TDS on purchase of goods under Section 194Q (w.e.f 01.07.2021) Abstract of the section is as follows Any person, being a buyer who is responsible for paying any sum to any resident (hereafter in this section referred to as the seller) for purchase of any goods of the value or aggregate of such
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FAQ :
Section 194Q requires buyers to deduct Tax Deducted at Source (TDS) at 0.1% on the purchase of goods when the aggregate value of such purchases from a seller exceeds fifty lakh rupees in a financial year.
A buyer is liable to deduct TDS under Section 194Q if their gross sales, receipts, or turnover in the preceding financial year exceeded Rs. 10 crore, and the aggregate purchase amount from a particular seller in the current financial year exceeds Rs. 50 lakh.
The TDS rate is 0.1% if the seller provides their PAN. If the seller does not have a PAN, the TDS rate is 5%.
This section does not apply to transactions where tax is deductible under other provisions of the Act or transactions covered by TCS under Section 206C, unless both sections apply, in which case Section 194Q prevails.
If a transaction is subject to TDS under Section 194Q and TCS (Tax Collected at Source) under Section 206C(1H), the provisions of Section 194Q will take precedence.
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