Section 194Q of the Income Tax Act, 1961, was introduced by the Finance Act, 2021. This Act is about Tax Deducted at Source (TDS) on the purchase of goods but not the provisions relating to services.
Section 194Q of the ITA begins to apply on July 1, 2021. Consequently, only purchases after July 1, 2021, must be subject to TDS. However, Beginning April 1, 2021, a threshold of Rs 50 lakh must be taken into account when making a purchase.
Applicability on the buyers in the following cases:
Also, read; How to File TDS Return Online?
What is the rate of TDS under this provision?
On sales exceeding Rs 50 Lacs in a financial year from a seller that the buyer has purchased goods worth more than Rs 50 Lacs, tax is to be deducted at source at the rate of 0.1%.
Following are the conditions on which Tax is to be Deducted at Source:
Calculation of TDS by keeping in mind the impact of GST.
When exactly is TDS deducted?
TDS is to be deducted at the point at which the seller receives the payment or when he receives credit for it.
Thus, if you did not make an advance payment, then this TDS has to be deducted at the time of purchase. If you have made an advance payment, however, you must deduct TDS immediately.
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