Whether TDS U/S 194Q Deductible on advance payment as on 31/03/2021 ?
This query is : Resolved
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CA SASHI KANT SHARMA
(Querist)
30 May 2022
Dear Sir,
Whether TDS Under Section 194Q Deductible on advance Payment MADE IN FY 2020-2021 against which Bill Raised in FY 2021-2022 after 01/07/2021.
Please expert help in the above issue.
Whether TDS Under Section 194Q Deductible on advance Payment MADE IN FY 2020-2021 against which Bill Raised in FY 2021-2022 after 01/07/2021.
Please expert help in the above issue.
CA R SEETHARAMAN
(Expert)
30 May 2022
Yes, TDS applicable on advance payment.
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CA SASHI KANT SHARMA
(Querist)
30 May 2022
sir if Bill is raised in April to June 2021 against such advances whether TDS is applicable on such advances?
30 May 2022
The Finance Act, 2021, has inserted Section 194Q with effect from 01-07-2021. Thus, provisions of this Section shall not apply on any payment made or credit made in the books of accounts before 01-07-2021. Consequently, it would apply to all purchases made on or after 01-07-2021.
In simple words, the tax should be deducted where the payment is made or amount is credited on or after 01-07-2021. Thus, where any of the trigger event (i.e., payment or credit) has occurred before the date of applicability of provision, no liability to deduct tax will arise.
However, while booking the actual invoice, if the threshold limit has crossed, and other conditions are satisfied, the buyer has to deduct the tax on the amount exceeding the threshold limit as on the date of booking the actual invoice.
In simple words, the tax should be deducted where the payment is made or amount is credited on or after 01-07-2021. Thus, where any of the trigger event (i.e., payment or credit) has occurred before the date of applicability of provision, no liability to deduct tax will arise.
However, while booking the actual invoice, if the threshold limit has crossed, and other conditions are satisfied, the buyer has to deduct the tax on the amount exceeding the threshold limit as on the date of booking the actual invoice.
CA R SEETHARAMAN
(Expert)
30 May 2022
TDS not applicable in such a case bill raised before the provisions applicable.
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