TDS u/s 194Q and Section 206AB

Deepak Tapse (Accounts Manager - Taxation)   (1771 Points)

15 July 2021  

Query is related to deduction from purchase bills


Purchase  Basic  Rs. 1000

GST @ 5%                    Rs. 50

Total Invoice Value   Rs. 1050/-

As per section 194Q, I supposed, to  deduct TDS @ 0.10% on Rs. 1000/-  i.e.. Rs. 1/-

But, if the supplier is requested for early payment discount i.e. cash discount, and we deduct some amount e.g.

Purchase Basic   1000

GST                       50

Less Cash Discount  -20

Total Payable  Rs. 1030/- 

In this respect, TDS should be deducted on Rs, 1000/-  or Rs. 980 (Rs. 1000 - discount 20%)

Thanks in advance