TDS 194Q applicability to Charitable Trusts

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This discussion clarifies the applicability of TDS Section 194Q to Charitable Trusts. It explains that TDS 194Q is generally not applicable to charitable trusts because it relates to the sale of goods within commercial entities. The key factor is the requirement for a 'business turnover' exceeding Rs. 10 crores, which most charitable trusts typically do not meet as they are not primarily engaged in business activities.

Raushan Kumar

Raushan Kumar (Querist)

04 February 2022 Dear Sir/Madam,

In reference to the TDS 194Q introduced w.e.f. 01.07.2021, request you to please help me to understand that,

1) Is it applicable to Charitable Trusts or not
2) If yes, then why and If not they why not..

Thanking you in advance.
Raushan Kumar

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

04 February 2022 1 it's not applicable to charitable trust as it's related to sale of goods related to commercial entities.

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Raushan Kumar

Raushan Kumar (Querist)

04 February 2022 Thank you Sir.. is there any specific clause/para where i can refer to submit my view to my senior

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

04 February 2022 A “business turnover” is required for these requirements to be applicable. As a result, until business revenue exceeds Rs. 10 crores, you are not required to deduct tax on purchases of items under 194Q.

Normally charitable trust will not do business.

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