TDS u/s 194Q @ 0.01% on Purchase of Goods

From 1^st July 2021, Buyer of Goods has to deduct TDS @ 0.01% u/s 194Q if his turnover exceeds Rs. 10 Crores in the preceding previous year and purchases from the Resident Seller exceeds Rs. 50Lakhs.

A higher rate of TDS @5% will be applicable if the Seller fails to furnish PAN to the buyer.

TDS u/s 194Q will not be applicable if TDS is applicable under any other section is applicable to the transaction.

If the transaction covered under both Section 194Q (TDS on Purchase) and Section 206C(1H) (TCS on Sales). Section 194Q will prevail over Section 206C(1H). Buyer should inform Seller not to collect TCS u/s 206C(1H) on the said transaction.

The above provision has been inserted under Finance Act 2021 (para-54)

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