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Circular No. 20 of 2021 F. No.370142/56/2021-TPL, Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes (TPL Division) Dated 25th November, 2021 Subject: Guidelines under sub-section (4) of section 194-0, sub-section (3) of section 194Q and sub-section (1-1) of section 206C of the Income-tax Act, 1961 -reg. Finance Act. 2020 inserted a new section 194-0 in the Income-tax Act 1961 (hereinafter referred to as the Act-) which mandates that with
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FAQ :
The guidelines aim to clarify the provisions of Sections 194O, 194Q, and 206C of the Income-tax Act, 1961, and remove difficulties faced by taxpayers.
Section 194O mandates that e-commerce operators must deduct income tax at 1% of the gross sale amount for goods or services facilitated through their platform, effective from October 1, 2020.
Effective from October 1, 2020, sellers receiving consideration for the sale of goods exceeding ₹50 lakh in a financial year must collect 0.1% of the sale consideration exceeding this threshold as income tax.
Section 194Q, effective from July 1, 2021, requires buyers purchasing goods from a resident seller, where the aggregate value exceeds ₹50 lakh in a financial year, to deduct 0.1% of the sum exceeding ₹50 lakh as income tax.
A 'seller' or 'buyer' is generally defined as a person whose total sales, gross receipts, or turnover from business exceeded ₹10 crore in the financial year preceding the transaction.
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