194Q versus 206C(1H) of the Income Tax act, 1961
The Finance Bill, 2021 has introduced section 194Q - TDS on purchase of goods which is having resemblance to section 206C(1H)- TCS on Sale of Goods brought in by Finance Bill, 2020. There is ambiguity regarding their simultaneous applicability to businesses, which is explained as under:
| 194Q | 206C(1H) | |
| Particulars | Remarks | |
| Purpose |
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| Applicable to |
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| Counter party |
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|
| Triggering point |
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|
| W.e.f |
|
|
| Timing |
|
|
| Advances |
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|
| Rate of TDS/TCS |
|
|
| PAN not available-Rate of TDS |
|
|
| On which amount |
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|
| Not applicable to |
|
|
| Exclusions |
|
If Buyer is-
|
| TAN Requirement |
|
|
| When to deposit/collect |
|
|
| Quarterly statement to be filed |
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| Certificate to be issued to seller/buyer |
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|
Example:
| Sr No. | Buyers Turnover | Sellers Turnover | Transaction Value | Section Applicable |
| 1 | 5Cr | 11Cr | 55Lakhs | 206C(1H) |
| 2 | 15Cr | 7Cr | 58Lakhs | 194Q |
| 3 | 12Cr | 13Cr | 54Lakhs | 194Q |
| 4 | 7Cr | 5Cr | 58Lakhs | NA |
| 5 | 12Cr | 15Cr | 45Lakhs | NA |
The views expressed above are of the author and does not intent for any professional guidance.
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