Information about 206CQ and 194NF of Income tax act

Sure! Here's a brief overview of Sections 206CQ and 194N under the Income Tax Act related to TDS and TCS:

Section 206CQ

• Type: This is a TCS (Tax Collected at Source) provision.

• Applicable on: Sale of goods (not services).

• When applicable:

  • If a seller’s aggregate sales, gross receipts or turnover from the business exceeds Rs. 10 crore in the preceding financial year,

  • Then, from 1st October 2020 onwards, TCS at 0.1% is to be collected on the amount exceeding Rs. 50 lakh in a financial year from a buyer.

• Rate: 0.1% on the amount received over Rs. 50 lakh from a buyer in the same financial year.

• Purpose: This is to track high-value transactions in goods and ensure tax compliance.

Section 194N

• Type: This is a TDS (Tax Deducted at Source) provision.

• Applicable on: Cash withdrawals from a bank account.

• When applicable:

  • If cash withdrawal from a bank (including cooperative banks) exceeds Rs. 1 crore in a financial year.

• Rate:

  • 2% TDS on cash withdrawal exceeding Rs. 1 crore in a financial year.

• Purpose: To curb large cash withdrawals and track cash movement for tax compliance.

Summary:

There are no Sections "206CQ" or "194NF". You probably mean these, with the latest status:

• Sec 194N (TDS on cash withdrawal): banks, co-operative banks and post offices deduct 2% on cash withdrawals above Rs 1 crore a year (Rs 3 crore for co-operative societies). For persons who have not filed ITRs for 3 years: 2% above Rs 20 lakh and 5% above Rs 1 crore.

• Sec 206C(1H) (TCS on sale of goods above Rs 50 lakh): omitted from 1 April 2025. Only Sec 194Q (TDS by buyer, turnover above Rs 10 crore) now applies.

• Sec 206AB / 206CCA (higher TDS/TCS for non-filers): omitted from 1 April 2025. Only 206AA/206CC (no PAN) remain.

• From 1 April 2026, TDS and TCS provisions are consolidated in Sec 393 (TDS) and Sec 394 (TCS) of the Income-tax Act, 2025.