TDS 194Q deduction

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This discussion clarifies the application of TDS Section 194Q, focusing on scenarios involving purchase amounts exceeding the ₹50 lakh threshold. It addresses how to calculate TDS when purchases cross this limit within a financial year, including situations where the threshold is met before or after a specific period like June. The advice confirms that once the aggregate purchase value from a party exceeds ₹50 lakhs in a financial year, TDS should be applied to subsequent transactions, and the threshold resets for the new financial year.

sabharinath

sabharinath (Querist)
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31 January 2022 I have 4 scenarios causing confusion on what amount I should deduct TDS on. I will list the scenarios below. Please kindly clarify....

1.The purchases for a client is above 60 lakhs from april to june 2021. On july, purchases worth 20 lakhs were made.

2. The purchases started from august. It was Rs. 39 lakhs. On november the purchases worth 59 lakhs were made.

3. The purchases upto june was 24 lakhs. On july, purchases worth 1 crore were made.

4. On august, purchases worth 54 lakhs were made & Tds was deducted. The september purchases were only 10 lakhs. Should Tds be deducted on the 10 lakhs?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 January 2022 1. On 20 lakhs, and any additional purchases thereafter.
2. On Rs. 48 lakhs +++
3. On Rs. 74 lakhs +++
4. Yes.

sabharinath

sabharinath (Querist)
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01 February 2022 Thank you so much sir.... One more doubt.... So, in case the aggregate has crossed over 50 lakhs upto june, then it is to be neglected & tds should be charged on the amounts occuring on and after july. In case if the aggregate has not crossed 50 lakhs upto june, then it should be added along with the amounts occuring after july to calculate the aggregate to be deducted for tds. Am I right sir?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 February 2022 Yes, Correct.

sabharinath

sabharinath (Querist)
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01 February 2022 Thank u sir..... In case, purchases from a particular party is over 50 lakhs in the year 21-22, Should we straightaway charge tds on the purchases starting from april 2022 or should we start over and begin charging tds on that party once it crosses 50 lakhs for the year 22-23?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 February 2022 Over the purchase value, exceeding Rs. 50 lakhs...

sabharinath

sabharinath (Querist)
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01 February 2022 Thank you so much sir

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 February 2022 Most Welcome ..

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