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Tds and tcs compliances

This query is : Resolved 

We purchased from a party in year 2020-2021 and they collected tcs from us as our purchase was more then 50 lakhs. Now in year 2021-22 they are telling me to deduct tds on payments. Will my seller have to collect Tcs and I have to deduct tds both at a time. Please clarify?

No. Only buyer has to collect TDS u/s. 194Q of IT act..

My turn over is less then 10 crores in py 2020-21.So am I liable to collect tds?

No.
Any person, being a buyer whose total sales/gross receipts/turnover from the business carried on by him exceed 10 crore rupees during the F.Y. immediately preceding the F.Y. in which the purchase of goods is carried out, and who is responsible for paying any sum to any resident (i.e. seller) for purchase of any goods of the value or aggregate of such value exceeding fifty lakhs rupees in any previous year, is liable to deduct TDS u/s. 194Q of IT act..

So in my case my sale is below Rs10 crores during py 2020-21 so I am not liable to deduct tds during 2021-2022? Please clarify?

It means tcs is not applicable now

It means TDS u/s. 194Q not applicable in your case; but that doesn't mean TCS not collectible by seller..
When TDS not eligible, seller will collect TCS as usual.

for purchase of any goods of the value or aggregate of such value exceeding fifty lakhs rupees in any previous year, is liable to deduct TDS u/s. 194Q of IT act..

What does here in any previous year relates to?


for purchase of any goods of the value or aggregate of such value exceeding fifty lakhs rupees in any previous year, is liable to deduct TDS u/s. 194Q of IT act..

What does here in any previous year relates to?


Our to is less then 10 crores in py 2020-21 but we have purchased more than Rs50 lakhs from a single party in py 2020-2021.so are we liable to deduct tds in fy 2021-2022.Please clarify?

In short it is Financial year, in which the TDS is liable to be deducted. (Technically, it is previous year to corresponding Assessment year, for which the transaction will get assessed).
As the TDS section 194Q is applicable to FY 2021-22; it is Previous Year to AY 2022-23..

As your turnover was less than 10Cr. in FY 2021-21, which is immediately preceding year to current financial year, You are not defined as 'buyer' for liability of sec. 194Q...

Read the Explanation given in the section ...
Explanation.—" For the purposes of this sub-section, "buyer" means a person whose total sales, gross receipts or turnover from the business carried on by him exceed ten crore rupees during the financial year immediately preceding the financial year in which the purchase of goods is carried out, not being a person, as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein."

tds will be required to be deducted only when the turnover for the previous yeari.e., (2020-21 in your case) exceeds 10 crores and it is the primary applicable criteria for the requirement of deduction of TDS u/s 194Q.



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