TDS on Purchase of Goods-TDS Section 194Q

The provisions of Section 194Q are given in simple terms as follows:

1. Buyer means: For the purpose of this Section 194Q, ‘Buyer‘ means a person whose total sales, gross receipts or turnover from the business carried on by him exceed ₹10 Crore during the financial year immediately preceding the financial year in which the purchase of goods is carried out;
2. TDS over and above ₹50 Lakh: TDS will be deducted on any sum paid over and above ₹50 Lakh in a financial year. This means TDS is not applicable on the whole amount rather on any sum exceeding ₹50 Lakh only in a financial year;
3. Rate of TDS: TDS @0.10% will have to be deducted on any sum exceeding ₹50 Lakh only;
4. If PAN not submitted: If the seller does not provide his PAN, in that case, the buyer has to deduct TDS @5% as per the newly amended section 206AA of the Income Tax Act;