Regarding TDS u/s 194Q for goods purchased

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This discussion clarifies that TDS under Section 194Q does indeed apply to the purchase of capital goods, not just stock for resale. The £50 lakh threshold for this section excludes GST components. It's also noted that if the seller doesn't provide a PAN, the TDS rate increases significantly to 5%. Importantly, Section 194Q only covers purchases from resident sellers, and if TDS is already deducted under another provision, 194Q does not apply. In cases where both 194Q and Section 206C(1H) (TCS) might apply, Section 194Q takes precedence.

Jaswinder singh

Jaswinder singh (Querist)
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05 February 2024 Respected Sir/Madam
Is TDS deducted u/s 194Q on Capital goods purchased? Normally as per goods we consider only goods we manufacture or resale not capital goods we capitalized in business?? So should we deduct on capex?? Kindly advice

RAJA P M

RAJA P M (Expert)
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05 February 2024 Yes, Sec 194Q also applicable for purchase of CAPITAL GOODS.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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17 August 2025 A few more important nuances to note:
The ₹50 lakh threshold is calculated excluding GST. So, GST components do not count toward the limit.
Equentis
If the seller does not provide PAN, the TDS rate increases sharply to 5% instead of 0.1%.
Microsoft Support
Swipe
Section 194Q applies only to purchases from resident sellers—imports or non-resident transactions are excluded.
database.taxsutra.com
If TDS is already being deducted under another provision, 194Q doesn’t apply. And where both 194Q and TCS (Section 206C(1H)) appear to apply, 194Q takes precedence—the seller need not collect TCS.
database.taxsutra.com
suvit.io
Capital goods are also covered—TDS applies if thresholds are crossed even on machinery or equipment purchases.

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