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Article contains Comparison Of Section 194Q AND 206C(1H) Of Income Tax Act, 1961 – For TDS & TCS and Comparison Of 206AB & 206CCA of Income Tax Act, 1961 – For Higher TDS/TCS Rates -In Case of Non-Filers of Returns.
Comparison Of Section 194Q AND 206C(1H) Of Income Tax Act, 1961 – For TDS & TCS
| PARTICULARS | 194Q – TDS | 206C (1H) – TCS |
| Nature | Tax to be DEDUCTED | Tax to be COLLECTED |
| Who will Deduct/Collect | BUYER | SELLER |
| Applicable w.e.f. | 01-07-21 | 01-10-20 |
| Applicable when | TURNOVER/GROSS RECEIPTS/SALES from the business of the BUYER should exceeds Rs.10 Crore during the P.Y. | RECEIPTS / SALES from the Business of SELLER should exceeds Rs.10 Crore during the P.Y. |
| Applicable on Aggregate Value exceeds Rs.50 Lacs in a F.Y. (Exemption Limit) | Purchase of GOODS (not on Services) – excluding Import of Goods | Sales Consideration RECEIVED – excluding Exports of Goods |
| Deducted or Collected at the Time when (including Advances) | On PAYMENT OR CREDIT, whichever is Earlier | On RECEIPT |
| Rates of Deduction/Collection | 0.1% | 0.1% (0.075% for FY 2020-21) |
| Payments/Advances before or after 01.07.2021, if exceeds Rs. 50 Lacs | If Purchases made/Advance paid till 30.06.2021 but payments done/purchases made after 01.07.2021 then No TDS | N.A. |
| Key points of Guidelines for TDS u/s 194Q thru Circular 13 dated 30.06.21 | TDS to be deducted on TAXABLE VALUE of Goods (excluding GST)/ Advance Payment then TDS on full amount. | TCS to be collected on TOTAL (INVOICE) VALUE of Goods (Including GST)/ Advance receipts. |
| Exemption Limit of Rs. 50 Lakh will apply for FY, therefore Purchases during Q1 (April-21 to June-21) to be consider while calculating limit of Rs. 50 Lacs but TDS required to be collected w.e.f. 01.07.2021 only | N.A. | |
| In case purchase return then excess TDS to be adjusted and set off with next purchases bill, if any but in case of replacement of goods then no adjustment required. | N.A. | |
| Common Points & Its applicability/non-applicability | On Non-resident not having PE not applicable | |
| Non-business activity not to be counted Turnover Limit of Rs. 10 Crore
(Exp:- Savings/FD interest etc.) |
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| Newly incorporated firms in FY 2021-22 then not applicable | ||
| Prority will be given to 194Q in case T/o exceeds Rs. 10 crore in case conditions for both 194Q and 206C(1H) are satisfied | ||
| TDS/TCS to Deposited with Government by 7th Day of subsequent month and Quarterly Statement is to be filed |
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Comparison Of 206AB & 206CCA of Income Tax Act, 1961 – For Higher TDS/TCS Rates -In Case of Non-Filers of Returns
| PARTICULARS | 206AB | 206CCA |
| Applicable w.e.f. | 01-07-21 | |
| Applicable only when a SPECIFIED PERSON i.e. ALL condition must be satisfied |
1. Who has not filed ITR for last 2 FY 2. Due date of ITR u/s 139(1) has Expired 3. TDS deducted at least Rs. 50,000 or more in each FY Note ITR fiing to be checked for (a) for FY 2021-22 need to check FY 2018-19 & 2019-20 (b) Check at begnning of the FY (on Compliance Check facility provided by IT portal) |
|
| TDS Rates, Whichever is higher | Double the Specified Rate i.e. 0.1% or 5% | Double the Specified Rate i.e. 0.1% or 5% |
| Applicablity of other section | This section 206AB will not be applicable when TDS is deducted under any other section i.e. except 194Q | This section 206CCA will not be applicable when TDS is deducted under any other section i.e. except 206C(1H) |
| What if, missing any one condition for Specified Person i.e. for ITR filing/TDS in last 2 FY | In that case he is not Specified Person at all, then TDS/TCS rates will be normal rates i.e. 0.1% as per 194Q/206C(1H) |
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| What if, Non Filers has also not furnsing the PAN/Aadhar | TDS/TCS will be deducted at HIGHER rates of i.e. 20% u/s 206AA or rate in force, meaning thereby higher rates u/s 206AB/206CCA will NOT APPLY |
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| Consequences, If not Deducted/Collected |
30% Disallowance of expenditure, Interest on Late payment, Late Fees, Penalties | |
| Declaration | Yes, Submitted/Obtained | |
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Very informative and explained in simple language.