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Section 194Q – Tax deduction on the purchase of goods | Academy Tax4wealth

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. Learn more!<br><br>For more info, visit us at:-<br>https://academy.tax4wealth.com/blog/section-194q-tax-deduction <br><br>t<br><br>

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Section 194Q – Tax deduction on the purchase of goods | Academy Tax4wealth

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  1. Section194Q–TaxDeductiononThePurchaseofGoods

  2. Section194QoftheIncomeTaxAct,1961,wasintroducedbytheFinanceAct, 2021.ThisActisaboutTaxDeductedatSource(TDS)onthepurchaseof goodsbutnottheprovisionsrelatingtoservices. • ApplicabilityofSection194Q • Section194QoftheITAbeginstoapplyonJuly1,2021.Consequently,only • purchasesafterJuly1,2021,mustbesubjecttoTDS.However,BeginningApril1, 2021,athresholdofRs50lakhmustbetakenintoaccountwhenmakinga • purchase. • Applicabilityonthebuyersinthefollowingcases: • Abuyerhaving, inthe precedingfinancialyear, aTurnoverorGrossReceiptorSalesmore than Rs.10Crore,and • A buyer whohasmadeapaymentofa sumtotheResidentSeller,and • Anysuchpaymenthastobe made onlyonthe purchasesofgoodsaggregating a valueexceeding Rs.50 Lacs. • Also,read;HowtoFileTDSReturnOnline? • WhatistherateofTDSunderthisprovision? • OnsalesexceedingRs50Lacsinafinancialyearfromasellerthatthebuyer has purchasedgoodsworthmorethanRs50Lacs,taxistobedeductedatsourceat therateof0.1%. • Calculationof TaxDeductedatSource (TDS): • FollowingaretheconditionsonwhichTaxistobeDeductedatSource: • Whenthepurchase froma sellerinafinancial yearis aboveRs50 Lacs • TDSwill be calculatedand deducted afterthe deductionofRs50 Lacsfromthe totalvalue ofthe purchaseof goods. • Asthe thresholdlimitisRs50 Lacs,itisaseller-wise deduction ineveryFinancial Year. • Also,Learn;HowTDSisCalculated? • RulesRegardingGST: • CalculationofTDSbykeepinginmindtheimpactofGST. • Turnover shallbecalculatedexcludingGST • However,the CalculationofTDSattherate of0.1%shall beincludingGST. • WhenexactlyisTDSdeducted?

  3. TDSistobedeductedatthepointatwhichthesellerreceivesthepaymentor whenhereceivescreditforit. Thus,ifyoudidnotmakeanadvancepayment,thenthisTDShastobededucted atthetimeofpurchase.Ifyouhavemadeanadvancepayment,however,youmust deductTDSimmediately. Formoreinfo,Visitusat:https://academy.tax4wealth.com/blog/

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