1. What is Section 194Q and 206C(1H)?
– Section 194Q is for Tax deducted at source (TDS) applicable from 01.07.2021 and
– Section 206C(1H) is for Tax Collected at source(TCS) applicable from 01.10.2020.
2. When is a person liable to deduct TDS u/s 194Q and TCS u/s 206C(1H)?
-TDS is to be deducted under section 194Q when the following conditions are satisfied-
a. The person (who is a buyer) has turnover/gross receipts/Sales from business of above Rs.10 crore during the F.Y 2020-21.
b. Such payment is to be done of the value/ aggregate of the value exceeding Rs.50 Lakhs to the seller in a financial year.
– TCS shall be deducted under section 206C(1H) when the following conditions are satisfied-
a. The person (who is a seller) has turnover/gross receipts/Sales from business of above Rs.10 crore during the F.Y 2020-21.
b. Receipts of the value/ aggregate of the value exceeding Rs.50 Lakhs to the seller in a financial year.
3. When will be the TDS deducted and at what Rate?
– TDS shall be deducted at the time of Payment or credit to the seller whichever is earlier.
– TDS shall be deducted on advance payment made.
– TDS shall be deducted at the rate of
– 0.1% on amount exceeding Rs.50 Lakhs.
– 5% on amount exceeding Rs.50 Lakhs, in case of non-availability of PAN.
4. When will be the TCS be collected and at what Rate?
– TCS shall be collected at the time of Receipt of sale proceeds.
– TCS shall be collected when advance is received.
– TDS shall be deducted at the rate of
– 0.1% on amount received exceeding Rs.50 Lakhs.
– 1% on amount exceeding Rs.50 Lakhs, in case of non-availability of PAN.
5. Which forms are required to be filed and what will be the periodicity?
– For TDS u/s 194Q- Form 26Q will be required to be filed quarterly.
– For TCS u/s 206C(1H)- Form 27EQ will be required to be filed quarterly.
6. Illustrations of applicability of TDS and TCS-
| Buyers Turnover above 10 crores | Sellers Turnover above 10 crores | Transaction Value above Rs.50 lakhs | Section Applicable |
| No | Yes | Yes | TCS- 206C(1H) |
| Yes | No | Yes | TDS- 194Q |
| Yes | Yes | Yes | TDS- 194Q |
| No | No | Yes | Not Applicable |
| Yes | Yes | No | Not Applicable |
| Yes | Yes | 1.Amount received above 50 lakhs
2.Purchase of goods below 50 lakhs |
TCS- 206C(1H) |
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This article is for guidance only, not to be substituted for detailed research or the exercise of professional judgment.
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when tds u/s 194q is applicable then tcs will be applicable or not with same party
No Sir. Either one of the section will be applicable.