Regarding Sec 194Q and 206C of Income tax Act

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This discussion addresses a common query regarding the interplay between Section 194Q (TDS on purchase of goods) and Section 206C (TCS on sale of goods) of the Income Tax Act. Specifically, it explores the situation where a seller collects TCS until December 2023, but the buyer's previous year turnover exceeds ₹10 crores, triggering Section 194Q from January 2024. The core concern is whether the buyer's inability to deduct TDS for the initial nine months constitutes non-compliance and could lead to departmental notices or demands, especially when TCS has already been collected.

Jaswinder singh

Jaswinder singh (Querist)
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20 January 2024 Respected Sir/Madam,
My query in context to Sec 194Q TDS and Sec 206C TCS, If Seller collect TCS till dec 2023 on sales but turnover of buyer exceeds 10 crores in previous year then 194Q prevails, In this case now, buyer deduct TDS from Jan 2024 and send declaration to Seller for deduction of TDS 194Q then for previous nine months till dec 2023 buyer not able to deduct TDS 194Q then in this case is there any non compliance notice received from the dept or any demand notice issued by dept.

Kindly guide or help in this regard