Section 194Q : TDS on purchase of Goods

Any person (being a buyer) who is responsible for paying any sum to any resident seller for purchase of any goods of the value exceeding 50 Lakhs in any Previous year required to deduct tax u/s 194Q w.e.f. July 1, 2021.

“Buyer here means whose Total sales, gross receipts or turnover from the business carried on by him exceeds Rs 10 crores during the FY immediately preceding the FY in which purchase carried out. However Buyer does not include a person notified by CG.”

Rate of TDS :- 0.1% of amt. exceeding 50 Lakhs (In no PAN cases , rate is 5%)

Time of Tax Deduction :- At the time of credit of such sum to the account of the seller or at the time of payment thereof (whichever is earlier).

Cases where Tax is not deductible :-

Case 1 – If tax is deductible under any other section of TDS

Case 2- If tax is collectable under provisions of Section 206C (but other than sub section (1H)

For Clarity purpose Where provisions of TCS on Sale of Goods u/s 206C(1H) applies and Provisions of TDS on Sale of Goods u/s 194Q applies, then provisions of section 194Q will prevail.

Disallowance : – Provisions of section 40(a)(ia) will be applicable in case of non deduction of TDS under section 194Q.