Grocery given to poor people

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This discussion clarifies whether purchasing grocery items for donation to the poor, such as rice, wheat, and sugar, makes an entity liable to deduct TDS under Section 194Q. The consensus is that these items are considered 'goods' under the Income Tax Act, and TDS is applicable based on the purchase activity, irrespective of whether the goods are for trading or donation. The purchaser's liability ends after filing the TDS return, with the seller responsible for claiming the TDS credit.

Rajkumar Gutti

Rajkumar Gutti (Querist)
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01 January 2025 We have purchased grocery items, like as Rice, wheat, soap, sugar, tea powder, edible oil, pulses, etc and distribute to poor people as a donation ( this is not our trading commodity ).
Yearly our purchases near about 2 crore.
Can we are liable to pay tds under 194 Q ( Tds on Purchases of Goods ) .
Is said grocery comes under definition of goods

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 January 2025 Yes, items you mentioned—rice, wheat, soap, sugar, tea powder, edible oil, and pulses—are classified as "goods" under the Income Tax Act. Therefore, they fall within the scope of Section 194Q, which applies to the purchase of goods.

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Rajkumar Gutti

Rajkumar Gutti (Querist)
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01 January 2025 But sir, this is not our trading / business activity goods. This expenses we not claim while computing
Business profit. Even though eligible for tds u/s 194 Q

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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02 January 2025 Yes, the TDS deduction is based on the purchase activity of the liable person, not connected with its usage. No exemption provided in the act for the purchase of goods given for donation. Moreover the tax is deducted over the sellers' dues, it is sellers' job to claim it; purchasers liability gets over after filing the relevant TDS return.

Rajkumar Gutti

Rajkumar Gutti (Querist)
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02 January 2025 Ok Thanks sir, धन्यवाद 🙏🙏🙏

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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02 January 2025 You are welcome.

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