Applicability : 1st July 2021
Section 194Q (1) states:
Any person, being a buyer who is responsible for paying any sum to any resident (hereafter in this section referred to as the seller) for purchase of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year, shall, at the time of credit of such sum to the account of the seller or at the time of payment thereof by any mode, whichever is earlier, deduct an amount equal to 0.1 per cent of such sum exceeding fifty lakh rupees as income-tax.
Section 194Q(5) states:
The provisions of this section shall not apply to a transaction on which—
(a) tax is deductible under any of the provisions of this Act; and
(b) tax is collectible under the provisions of section 206C other than a transaction to which sub-section (1H) of section 206C applies.]
Now we discuss applicability of this Section 194Q in our Tax Soul Term:
• Applicability on Buyer to Deduct Tax on Purchase of Goods
• Gross Turnover/Receipt of the assesse immediately FY does exceed Rs10 Crore
• The buyer is liable to deduct TDS at the rate of 0.1% of the purchase value above ₹ 50 Lakhs. In Case of No PAN NO. @ 5%
• No Requirement of deduction, if deduction under any other Section of TDS is to be made
• It is only applicable on Resident , therefore if goods imported … NO TDS
• It is applicable on every purchase, even on Capital Assets.
• In case buyer not comply this section, disallowance of an expenses up to 30%
Further if TDS is deductible under this section , TCS of section 206C(1H) would not be applicable.
Author
Mrs. Nikita Mahawar
Qualification: B.Com (H)
Location: Kolkata