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Tds deduction

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Abhishek Selvam O

258 Points Posted on 11 April 2020

Is tds to be deducted only on expenses?
I am a trading company purchases goods from a customer should I deduct tds even on that?

Replies (3)

Quick Summary

This discussion clarifies that TDS (Tax Deducted at Source) is generally not applicable to the purchase of traded goods under the Income Tax Act. While TDS is typically associated with expenses, the focus shifts to TCS (Tax Collected at Source) for specific sales, particularly for e-commerce aggregators who must deduct 1% on transactions. GST regulations also outline specific entities responsible for tax deduction.

Piyush Khandelwal

28 Points Posted on 11 April 2020

No, you are not required to deduct TDS on purchase of traded goods.

Abhishek Selvam O

258 Points Posted on 11 April 2020

Should we deduct tds only on expenses right?

Spurto Consultancy Services

Consultant

1366 Points Posted on 11 April 2020

No TDS is not applicable in case of sale of goods under Income Tax Act. However TCS is applicable in specified sales.

Under GST Following people are responsible for deducting tax-:

(a) a department or establishment of the Central or State Government, or

(b) local authority, or

(d) such persons or category of persons as may be notified, by the Central or a State Government on the recommendations of the Council.

TCS is applicable in case of E-commerce aggregators for deducting and depositing tax at the rate of 1% from each of the transaction. Any dealers/traders selling goods/services online would get the payment after deduction of 1% tax.