prpri Comparison of Section 194Q, 206C(1H), 206AB & 206CCA Comparison of Section 194Q, 206C(1H), 206AB & 206CCA

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.)

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

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)
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
Consequences,
If not Deducted/Collected
30% Disallowance of expenditure, Interest on Late payment, Late Fees, Penalties
Declaration Yes, Submitted/Obtained

Author Bio

Qualification: CA in Practice
Company: VASHISHTHA & ASSOCIATES
Location: MUMBAI, Maharashtra, India
Member Since: 04 Jun 2018 | Total Posts: 1

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