Ashok Pitroda
Quick Summary
Finance Act 2020had amended Section 206C of the Income-tax Act 1961 by inserting a new subsection (1H) that says that tax shall be collected by the seller from the buyer if there is a sale of goods to such buyer andthe seller receives any amount as consideration for the sale of any goods of the valu
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FAQ :
Section 194Q, effective from 01.07.2021, requires any buyer whose purchases of goods exceed ₹50 lakhs in a financial year to deduct 0.1% of the sum exceeding ₹50 lakhs as income tax at the time of payment or credit, whichever is earlier.
Section 206C(1H), effective from 01.10.2020, requires sellers receiving consideration for the sale of goods exceeding ₹50 lakhs in a financial year to collect 0.1% of the sale consideration exceeding ₹50 lakhs as income tax at the time of receipt.
For Section 194Q, a 'buyer' is a person whose total sales, gross receipts, or turnover from their business exceeded ₹10 crore in the financial year immediately preceding the financial year in which the purchase is made.
For Section 206C(1H), a 'seller' is a person whose total sales, gross receipts, or turnover from their business exceeded ₹10 crore in the financial year immediately preceding the financial year in which the sale is made.
Under Section 194Q, tax is deducted by the buyer at the time of payment or credit, whichever is earlier. Under Section 206C(1H), tax is collected by the seller at the time of receipt of payment.
No, Section 194Q does not apply to transactions where TDS has already been deducted under other provisions of the Act.
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