Compute the 0.1% TDS deduction for corporate and business buyers with previous year turnover > ₹10 Crores purchasing goods exceeding ₹50 Lakhs.
Must exceed ₹10,00,00,000 (₹10 Cr).
Section 194Q has priority over Section 206C(1H). If the buyer is liable to deduct TDS under 194Q, the seller will NOT collect TCS under 206C(1H).
Deduct TDS at the time of credit to seller account or payment, whichever is earlier.
Section 194Q requires any buyer whose total sales, gross receipts, or turnover from business exceeds ₹10 Crores in the preceding financial year to deduct TDS at 0.1% on purchase of goods from a resident seller if aggregate purchases exceed ₹50 Lakhs in the current financial year.
As clarified by CBDT Circular No. 13/2021, when tax is deducted at the time of credit to the seller's account, TDS is to be deducted on the amount credited without including GST if GST is separately indicated on the invoice. If advance payment is made, TDS applies on the entire gross advance.
If the buyer fails to deduct or deposit TDS under Section 194Q, 30% of the purchase value on which tax was deductible will be disallowed as an expense in the buyer's business income tax computation.
| Feature | Section 194Q (Buyer TDS) | Section 206C(1H) (Seller TCS) |
|---|---|---|
| Who Deducts / Collects? | Buyer deducts TDS | Seller collects TCS |
| Turnover Threshold | Buyer's Turnover > ₹10 Cr in previous FY | Seller's Turnover > ₹10 Cr in previous FY |
| Transaction Limit | > ₹50 Lakhs per seller in FY | > ₹50 Lakhs per buyer in FY |
| Standard Rate | 0.10% | 0.10% |
| Precedence / Priority | Takes Precedence (Overrides 206C(1H)) | Secondary (Applies only if 194Q not applicable) |
No. Section 194Q applies strictly to the purchase of "goods". TDS on services is governed by Sections 194C, 194J, etc.
Since the buyer had zero turnover in the preceding financial year, Section 194Q will not apply to the buyer. In such a scenario, the seller may collect TCS under Section 206C(1H) if the seller meets the ₹10 Cr criteria.
Yes. Purchase of capital goods (machinery, plant, computers) by a qualifying buyer exceeding ₹50 Lakhs is subject to Section 194Q TDS.