194Q @0.1% below 10 crore turnover tcs or tds applicable

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This query is : Resolved

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This discussion clarifies whether Tax Deducted at Source (TDS) under Section 194Q applies to purchases exceeding £50 lakhs if the buyer's annual turnover is below £10 crore. The consensus is that if the purchaser's total turnover in the preceding financial year was less than £10 crore, Section 194Q is not applicable, regardless of the purchase value. This exemption also applies if the seller's turnover is below the threshold, meaning neither TDS nor TCS would be deductible.

ARCHANA

ARCHANA (Querist)

13 March 2024 Sir/Mam,

We have purchased good from one party crossed above 50 Lakhs , now my doubt is our turnover both Fy 2022-23 and 2023-24 below 10 crores we have to deduct 194Q @0.1% Tds or not

TCS or TDS applicable plz clarify

Thanking yo,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 March 2024 Your turnover is below 10 crore 194Q not applicable.

Message likes : 1 times

ARCHANA

ARCHANA (Querist)

13 March 2024 thank you sir for your reply

ARCHANA

ARCHANA (Querist)

13 March 2024 Sir,
earlier years our turnover crossed above 10 crores we have deducted TDS crossed above 50 Lakhs , only last two year fy our turnover below 10 crores

Now my doubt is 194Q is applicable on turnover basis every fy or once started it is continued please clarify

Thanking you,

Mayur Gondaliya

Mayur Gondaliya (Expert)

13 March 2024 Following situations are exempted from 194Q –
a. Total sales/ gross receipts/ turnover of the purchaser is less than INR 10 crores in the immediately preceding Financial Year;

b. The aggregate value of purchases from the seller is less than INR 50 Lakhs in the Financial Year;

ARCHANA

ARCHANA (Querist)

13 March 2024 Thank you for your reply

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

16 August 2025 Also note that if both the buyer’s and seller’s turnover is below ₹10 crore, then neither TDS under Section 194Q nor TCS under Section 206C(1H) applies. TDS under Section 194Q applies only upon the purchaser exceeding the ₹10 crore threshold, and TCS under Section 206C(1H) only if the seller’s turnover exceeds ₹10 crore.

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