Applicability of TDS u/s 194Q on purchase of Vehicle
it both the section applicable in one scenario then section 206C(1F) will prevail
For car purchase 206C(1F) is APPLIED
No...TDS U/s 194Q is not applicable because the seller has to charge TCS U/s 206C(1F) .
Rule for avoiding overlap:
• Car above Rs 10 lakh: the seller collects TCS at 1% under Sec 206C(1F). Sec 194Q(5) says 194Q does not apply to a transaction on which tax is collectible under Sec 206C (other than 206C(1H)). So only TCS applies, not 194Q.
• Car up to Rs 10 lakh: no TCS under 206C(1F). Then 194Q applies if the buyer's turnover exceeded Rs 10 crore in the preceding FY and purchases from that dealer exceed Rs 50 lakh in the year (TDS 0.1% on the excess). For a single car below Rs 10 lakh, 194Q rarely triggers unless you buy a fleet from the same dealer.
• From 22 April 2025, Sec 206C(1F) also covers notified luxury goods above Rs 10 lakh (watches, art, handbags etc.).
• TCS is creditable against your tax. Make sure the dealer files Form 27EQ with your PAN.
• From 1 April 2026: Sec 393/394 of the Income-tax Act, 2025, with the same overlap rule.
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