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194Q versus 206C(1H)

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CA Preksha Choraria

CA-Practicing

480 Points Posted on 05 February 2021

Replies (2)

Quick Summary

This discussion clarifies the application of Section 194Q regarding Tax Deducted at Source (TDS) and its relationship with Section 206C(1H) concerning Tax Collected at Source (TCS). Generally, if TDS or TCS is applicable under any other provision, Section 194Q won't apply. However, a key exception exists: if both Section 194Q TDS and Section 206C(1H) TCS are applicable to a transaction, only the TDS under Section 194Q will be enforced.

CA. Sourav Sarkar

Chartered Accountant

24588 Points Posted on 05 February 2021

194Q is proposed to provide that the provisions of this section shall not apply to,-

(i) a transaction on which tax is deductible under any provision of the Act; and

(ii) a transaction, on which tax is collectible under the provisions of section 206C other than transaction to which sub-section (1H) of section 206C applies.

This means, if on a transaction a TDS or tax collection at source (TCS) is required to be carried out under any other provision, then it would not be subjected to TDS under this section. There is one exception to this general rule. If on a transaction TCS is required under sub-section (1H) of section 206C as well as TDS under this section, then on that transaction only TDS under this section shall be carried out.