TDS applicability on Material Purchased for Building under Construction

Yes, if the TDS deduction criteria as per sec. 194Q of IT act satisfied...

Tds is deducted u/s 194Q @ 0.1% of the amount exceeding 50 lacs. However the rate will be 5% in case the assesse has not furnished PAN

Firstly , if you have any contract with seller and you purchased building material for business's Building (not personal purpose) then you have to deduct tds under section 194C
Secondly, if you purchased a material for building(for any Purpose) then Buyer have to deduct TDS of seller if he purchase goods for more than 50Lacs in a year and
for this section 'Buyer' means a person if your business sale is more than 10cr in last financial year, it means if your business sale is less than 10cr in last year then sec 194Q will not apply on you and you did not need to deduct tds of seller.

Agree that Sec 194Q applies if the conditions are met. To complete the picture:

• Sec 194Q applies to any purchase of goods, whether revenue or capital (building material included), by a buyer whose turnover exceeded Rs 10 crore in the preceding FY. TDS is 0.1% on purchases above Rs 50 lakh in the year from a single seller (5% if no PAN).

• The nature of use (own building) doesn't matter. Only the buyer's turnover and the purchase value matter.

• If it is a works contract (supply + installation, e.g. a contractor building the structure), it is Sec 194C (1%/2%), not 194Q.

• GST ITC on material for construction of your own building is blocked (Sec 17(5)(d)), except plant and machinery. Capitalise the GST.

• TCS under Sec 206C(1H) on the seller's side was omitted from 1 April 2025, so there is no TCS/TDS overlap issue now.

• From 1 April 2026: Sec 393 of the Income-tax Act, 2025.