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New Section 194Q – TDS on Purchase of Goods (Union Budget 2021)

Applicability: This shall be effective 1st July’21

TDS Rate:

When to Deduct?

Deduction by Whom?

Consequences of non-deduction by Purchaser:

Clarifications:

Example: Mr. Todi purchases goods worth Rs 1Cr for his business. Mr. Todi shall track purchases from each supplier and shall deduct TDS @ 0.1% as soon as purchase exceeds Rs 50 lacs. In above case, first Rs. 50L of purchase shall not be subject to TDS and on rest Rs. 50L TDS under section 194Q will be deducted i.e. Rs 5,000. For rest of all the transactions during the year TDS will be deducted for each purchase transaction.

Authored by – CA Anushka Saraogi

TDS/TCS Provisions – Union Budget 2021

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