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Which Section 194Q or 206C(1H) will be applicable??? 1. What is Section 194Q and 206C(1H)? - Section 194Q is for Tax deducted at source (TDS) applicable from 01.07.2021 and - Section 206C(1H) is for Tax Collected at source(TCS) applicable from 01.10.2020. - 2. When is a person liable to deduct TDS u/s 194Q and TCS u/s 206C(1H)? -TDS is to be deducted under section 194Q when the following conditions are satisfied- a. The person (who is a buyer) has turnover/gross receipts/Sales from business of above Rs.10 crore during the F.Y 2020-21. b. Such payment is to be done of the value/ aggregate of the value exceeding Rs.50 Lakhs to the seller in a financial year. - TCS shall be deducted under section 206C(1H) when the following conditions are satisfied- a. The person (who is a seller) has turnover/gross receipts/Sales from business of above Rs.10 crore during the F.Y 2020-21. b. Receipts of the value/ aggregate of the value exceeding Rs.50 Lakhs to the seller in a financial year. 3. When will be the TDS deducted and at what Rate? - TDS shall be deducted at the time of Payment or credit to the seller whichever is earlier. - TDS shall be deducted on advance payment made. - TDS shall be deducted at the rate of - 0.1% on amount exceeding Rs.50 Lakhs. - 5% on amount exceeding Rs.50 Lakhs, in case of non-availability of PAN. 4. When will be the TCS be collected and at what Rate? - TCS shall be collected at the time of Receipt of sale proceeds. - TCS shall be collected when advance is received. - TDS shall be deducted at the rate of - 0.1% on amount received exceeding Rs.50 Lakhs. - 1% on amount exceeding Rs.50 Lakhs, in case of non-availability of PAN. 5. Which forms are required to be filed and what will be the periodicity? - For TDS u/s 194Q- Form 26Q will be required to be filed quarterly. - For TCS u/s 206C(1H)- Form 27EQ will be required to be filed quarterly. 6. Illustrations of applicability of TDS and TCS- Buyers Turnover above 10 crores Sellers Turnover above 10 crores Transaction Value above Rs.50 lakhs Section Applicable No Yes Yes TCS- 206C(1H) Yes No Yes TDS- 194Q Yes Yes Yes TDS- 194Q No No Yes Not Applicable Yes Yes No Not Applicable Yes Yes 1.Amount received above 50 lakhs 2.Purchase of goods below 50 lakhs TCS- 206C(1H) Hope this article helps you. Happy reading!! Stay Home- Stay Safe :) This article is for guidance only, not to be substituted for detailed research or the exercise of professional judgment. #docx
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