Potential consequence of consolidated TDS entries?

TDS Under Section 194Q: Does Consolidating Entries Risk Tax Scrutiny?

When filing TDS returns under Section 194Q, some businesses combine multiple purchases from a single seller into one entry for simplicity. For example, a car showroom might consolidate monthly purchases from a supplier like Hyundai, totaling ₹10 crore, into a single transaction.

The Concern: While this streamlines reporting, could it trigger questions from the tax department about the source of funds? Individual entries clearly show the rotational nature of funds (sales revenue funding new purchases), but a single large entry might raise red flags about the origin of the ₹10 crore.

  • Has anyone faced challenges with consolidating entries under Section 194Q?

  • Is this a valid point?
Replies (2)
Quick Summary
This discussion explores the potential risks of consolidating multiple TDS entries under Section 194Q into a single transaction. While simplifying reporting, consolidating large sums from a single supplier could raise red flags with the tax department regarding the source of funds. The legitimacy of this concern is acknowledged, highlighting the importance of transparency in tax filings.

Yes. Given the potential for scruitiny and the importance of transparency in tax reporting, the concern about consolidating entries under section 194Q appears to be legitimate.

Neha Madam, 

 

Yes the tax liabilty can be self computed and interest too based on your total income and taxes already paid /deducted.

 

But you may be comfortable with computation in ITR.

But in my view , if the return filing due date has been extended, the same should be also applicable for the interest .

Also v can hope that ITR 2 is notified before say 25 th july to pay SAT.

 

 

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