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Disallowance us 40a(ia) for non deduction of tax us 194Q

Krishna (Assistant) (656 Points)

05 October 2022

Sir; If the assessee doesn't deduct TDS Us 194Q because his supplier collects TCS us 206C(1H). whether disallowance is required to be made us 40a(ia) for non deduction of tax us 194Q i.e. @ 30% ?? As per IT provision; 194Q prevails over 206C(1H); however the supplier collects TCS till March 22. please reply

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177721 Points)
Replied 05 October 2022

The concession has been provided by notification in such case, so no dis-allowance...

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Krishna (Assistant) (656 Points)
Replied 05 October 2022

Dhirajlal sir; can you provide me that notification link. ??

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177721 Points)
Replied 05 October 2022

Read::

Circular No. 13 of 2021 | Dated: 30th June, 2021..... Last Paragraph...

4.9.5.(v) If a transaction is both within the purview of section 194-Q of the Act as well as sub-section (1 H) of section 206C of the Act, the tax is required to be deducted under section 194-Q of the Act. The transaction shall come out of the purview of sub-section (1H) of section 206C of the Act after tax has been deducted by the buyer on that transaction. Once the buyer has deducted the tax on a transaction, the seller is not required to collect the tax under sub-section (1H) of section 206C of the Act on the same transaction. However, if, for any reason. tax has been collected by the seller under sub-section (1 H) of section 206C of the Act, before the buyer could deduct tax under section 194-Q of the Act on the same transaction, such transaction would not be subjected to tax deduction again by the buyer. This concession is provided to remove difficulty, since tax rate of deduction and collection are same in section 194Q and subsection (1H) of section 206C of the Act.

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