TDS u/s 194Q on purchase of goods



Quick Summary
Section 194Q, introduced by the Finance Bill 2021-22, mandates Tax Deducted at Source (TDS) on the purchase of goods. This section applies when a buyer purchases goods exceeding a certain threshold from a resident seller. The buyer is generally responsible for deducting the tax at a rate of 0.1% on the sale consideration.

TDS on payment of a certain sum for purchase of Goods - New Section 194Q inserted by The Finance Bill Budget 2021-22

Applicability of Section 194Q

Rates of Section 194Q

TDS u/s 194Q: Tax on Purchase of Goods Explained

Particulars

Scenario-1

Scenario-2

Scenario-3

Turnover of Seller (In Cr.)

12

6

12

Turnover of Buyer (In Cr.)

6

12

12

Sale of Goods  (In Cr.)

2

2

2

Sales Consideration paid during the year (In Cr.)

1

1

1

Who is liable to deduct or collect tax?

Seller

Buyer

Buyer

Rate of Tax

0.1%

0.1%

0.1%

Amount on which tax to be deducted or collected (In Cr.)

0.5

1.5

1.5

Tax to be deducted or collected

5,000/-

15,000/-

15,000/-

 
 



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