Tds 194q applicable or not

Section 194Q strictly requires a buyer's turnover to have exceeded ₹10 crore in the previous financial year. Because a newly formed firm has no preceding financial year, it is completely exempt from deducting TDS under 194Q—even for purchases over ₹50 lakh—during its first year of business.

Section 194Q applies to a buyer whose turnover in the preceding financial year exceeded Rs 10 crore, on purchases from a single seller exceeding Rs 50 lakh in the financial year, at 0.1% TDS. For a newly incorporated entity with no preceding year turnover, 194Q is not applicable in the first year of operations regardless of purchase amounts. The Income Tax Act 2025 effective April 1, 2026 has renumbered this provision, but the substance is identical. If you are filing for FY 2025-26, continue using the old section numbering. Full breakdown of all TDS and TCS changes effective FY 2026-27: https://taxgarden.in/blog/tds-tcs-changes-fy-2026-27-complete-guide