{"id":6140,"date":"2023-07-24T17:57:24","date_gmt":"2023-07-24T17:57:24","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=6140"},"modified":"2025-12-26T11:16:04","modified_gmt":"2025-12-26T11:16:04","slug":"tds-u-s-194q","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/tds-u-s-194q\/","title":{"rendered":"TDS u\/s 194Q on payments made to Kachha Arahitia"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-6029\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/07\/TDS-122.jpg\" alt=\"TDS\" width=\"1200\" height=\"752\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/07\/TDS-122.jpg 1200w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/07\/TDS-122-300x188.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/07\/TDS-122-1024x642.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/07\/TDS-122-768x481.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/07\/TDS-122-800x501.jpg 800w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69f564dba92a9\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69f564dba92a9\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-u-s-194q\/#Tax_Deducted_at_Source_under_section_194Q_on_payments_made_to_Kachha_Arahitia\" title=\"Tax Deducted at Source under section 194Q on payments made to Kachha Arahitia\">Tax Deducted at Source under section 194Q on payments made to Kachha Arahitia<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-u-s-194q\/#Meaning_of_Kachha_Arahitia\" title=\"Meaning of Kachha Arahitia\">Meaning of Kachha Arahitia<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-u-s-194q\/#Tax_Deducted_at_Source_us_194Q_on_payments_made_to_Kachha_Arahitia\" title=\"Tax Deducted at Source u\/s 194Q on payments made to Kachha Arahitia\">Tax Deducted at Source u\/s 194Q on payments made to Kachha Arahitia<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-u-s-194q\/#Summary_of_Section_194Q_%E2%80%93_TDS_on_Purchase_of_Goods\" title=\"Summary of Section 194Q \u2013 TDS on Purchase of Goods\u00a0\">Summary of Section 194Q \u2013 TDS on Purchase of Goods\u00a0<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-u-s-194q\/#Applicability\" title=\"Applicability\">Applicability<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-u-s-194q\/#Rate_of_TDS\" title=\"Rate of TDS\u00a0\">Rate of TDS\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-u-s-194q\/#Time_of_Deduction\" title=\"Time of Deduction : \">Time of Deduction : <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-u-s-194q\/#Effective_Date\" title=\"Effective Date : \">Effective Date : <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-u-s-194q\/#Key_Exclusions\" title=\"Key Exclusions\">Key Exclusions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-u-s-194q\/#Deposit_Reporting\" title=\"Deposit &amp; Reporting\">Deposit &amp; Reporting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-u-s-194q\/#CBDT_Clarification\" title=\"CBDT Clarification\">CBDT Clarification<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Tax_Deducted_at_Source_under_section_194Q_on_payments_made_to_Kachha_Arahitia\"><\/span><span style=\"color: #000080;\"><strong>Tax Deducted at Source under section 194Q on payments made to Kachha Arahitia<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Meaning_of_Kachha_Arahitia\"><\/span><span style=\"color: #000080;\"><strong>Meaning of Kachha Arahitia<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>A kachha arahtia enters into a privity contract. in order for his constituent and the third party to be held responsible for one another, moreover that A kachha arhatia acts only as an agent of his constituent and never acts as a principal.<\/li>\n<li>On the other hand, Pacca Arhtia makes himself answerable under the contract to both his constituents and the third party. A pacca arhatia, on the other hand, is entitled to substitute his own goods towards the contract made for the constituent and buy the constituent&#8217;s goods on his personal account &amp; so kachha arahtia acts as a principal as regards his constituent.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Tax_Deducted_at_Source_us_194Q_on_payments_made_to_Kachha_Arahitia\"><\/span><span style=\"color: #000080;\"><strong>Tax Deducted at Source u\/s 194Q on payments made to Kachha Arahitia<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Kachha Arahitia are involved in selling crops on behalf of farmers. Kachha Arahitia are agents for an unnamed principal. The Kachha Arahitia remuneration consists solely of commission &amp; Kachha Arahitia is not interested in P&amp;L made by his constituent. The Kachha Arahitia does not have any dominion over the goods.<\/li>\n<li>Tax Deducted at Source under section 194Q is deducted by the purchasers from Kachha Arahitias. Buyer in such cases is treating kachha Arahitias as a seller so covering transaction under section 194Q for the purposes of Tax Deducted at Source. Sale transaction by the Kachha Arahitia is not part of his business receipts\/ turnover.<\/li>\n<li>The Centralized Processing Centreof the Income Tax department\u00a0(CPC) while processing the returns of Kachha Arahitia raises the objection that the sales\/ turnover is not declared in the gross receipts.<\/li>\n<li>Central Board of Direct Taxes\u00a0in its circular: No 452 (1986) had clarified in Para 4 of circular that so far as Kachha Arahitias are concerned the turnover does not include the sales effected on behalf of principals &amp; only commission (gross) has to be considered for the purpose of Income tax section 44AB.<\/li>\n<li>So some clarification is required on this issue from the Central Board of Direct Taxes\u00a0, on whether Tax Deducted at Source required to be deducted on the transaction of sale via Kachha Arahitias.<\/li>\n<\/ul>\n<div>\n<h2><span class=\"ez-toc-section\" id=\"Summary_of_Section_194Q_%E2%80%93_TDS_on_Purchase_of_Goods\"><\/span><span style=\"color: #000080;\">Summary of <strong>Section 194Q \u2013 TDS on Purchase of Goods<\/strong>\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-9797\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/06\/GST-on-suprchases.jpeg\" alt=\"Section 194Q \u2013 TDS on Purchase of Goods\" width=\"1132\" height=\"1510\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/06\/GST-on-suprchases.jpeg 973w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/06\/GST-on-suprchases-225x300.jpeg 225w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/06\/GST-on-suprchases-768x1025.jpeg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/06\/GST-on-suprchases-800x1067.jpeg 800w\" sizes=\"(max-width: 1132px) 100vw, 1132px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Applicability\"><\/span><span style=\"color: #000080;\"><strong>Applicability<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Who? Buyer with turnover &gt; INR 10 crore in the preceding FY, and the buyer<span style=\"font-size: 16px;\">\u00a0is responsible for <\/span>deduction, deposit, return filing, and issuing certificates<span style=\"font-size: 16px;\">.<\/span><\/li>\n<li>Transaction Type: Purchase of goods from a resident seller.<\/li>\n<li>Threshold: TDS applies when aggregate purchases exceed INR 50 lakh per seller in a financial year.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Rate_of_TDS\"><\/span><span style=\"color: #000080;\"><strong>Rate of TDS\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li><strong>0.1%<\/strong> on the amount exceeding INR 50 lakh.<\/li>\n<li><strong>5%<\/strong> if seller does not furnish PAN (Sec 206AA).<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Time_of_Deduction\"><\/span><span style=\"color: #000080;\"><strong>Time of Deduction : <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-size: 16px;\">At the <\/span>earlier of credit or payment<span style=\"font-size: 16px;\">, including advance payments.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Effective_Date\"><\/span><span style=\"color: #000080;\"><strong>Effective Date : <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-size: 16px;\">Applicable on purchases <\/span>on or after 1 July 2021<span style=\"font-size: 16px;\">.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Key_Exclusions\"><\/span><span style=\"color: #000080;\"><strong>Key Exclusions<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Non-resident sellers.<\/li>\n<li>Transactions already covered under other TDS provisions.<\/li>\n<li>Services, imports, electricity, and similar items.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Deposit_Reporting\"><\/span><span style=\"color: #000080;\"><strong>Deposit &amp; Reporting<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Deposit: By 7th of next month.<\/li>\n<li>Quarterly Return: Form 26Q.<\/li>\n<li>Credit: Reflected in seller\u2019s Form 26AS.<\/li>\n<li>TDS Certificate: Form 16A.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"CBDT_Clarification\"><\/span><span style=\"color: #000080;\"><strong>CBDT Clarification<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Section 194Q overrides Section 206C(1H).<\/li>\n<li>If 194Q applies \u2192 TCS under 206C(1H) NOT applicable.<\/li>\n<\/ul>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Tax Deducted at Source under section 194Q on payments made to Kachha Arahitia Meaning of Kachha Arahitia A kachha arahtia enters into a privity contract. in order for his constituent and the third party to be held responsible for one another, moreover that A kachha arhatia acts only as an agent of his constituent and &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[100],"tags":[820,553],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/6140"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=6140"}],"version-history":[{"count":5,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/6140\/revisions"}],"predecessor-version":[{"id":9799,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/6140\/revisions\/9799"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=6140"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=6140"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=6140"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}