{"id":3547,"date":"2021-06-09T20:47:11","date_gmt":"2021-06-09T20:47:11","guid":{"rendered":"http:\/\/caindelhiindia.com\/blog\/?p=3547"},"modified":"2025-12-26T11:08:31","modified_gmt":"2025-12-26T11:08:31","slug":"tds-on-purchase-of-goods","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/tds-on-purchase-of-goods\/","title":{"rendered":"Applicability of TDS on Purchase of Goods (Section 194Q)"},"content":{"rendered":"
\"TDS<\/a>
TDS ON PURCHASE OF GOODS<\/strong><\/figcaption><\/figure>\n

BRIEF INTRODUCTION<\/strong><\/span><\/p>\n

A new section was inserted in the Income Tax Act 1961, named section 194Q, and the same was introduced in\u00a0Budget 2021-22, which relates to payment of TDS for purchase of goods. Under this section, a person, being a buyer paying any sum to any resident seller for purchase of any goods of the value in single transaction or in aggregate during a financial year exceeding Rs. 50 lakhs, will be required to deduct an amount of TDS @ 0.1% on the amount exceeding Rs 50 lakhs, at the time of crediting the amount in the account of the seller or at the time of payment on the place of purchase, whichever is earlier.<\/p>\n

With the introduction of Finance Act 2021, a new section, Section 194Q, was inserted, providing for TDS to be deducted on purchase of goods, to be effective from July 1, 2021. It is similar to the structure of Section 206C(1H) introduced in Finance Act 2020, which relates to collection of TCS on consideration received from the buyer. Thus, the Section 206C(1H) imposes a liability on the seller to collect TCS from the buyer, while the Section 194Q, imposes a liability on the buyer to deduct TDS while paying to the seller.<\/p>\n

Treatment of TDS in the context of debit notes issued for shortages or rate differences is largely accurate and well-reasoned:<\/p>\n

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Table of Contents<\/p>\n