TDS Section 194Q
Definition
The provision requiring a buyer with turnover above a prescribed limit to deduct tax at source on purchases of goods from a resident seller beyond an annual value threshold. It interacts with the seller's TCS obligation under 206C(1H), with rules on which applies.
Common questions
What happens when both 194Q and 206C(1H) could apply?
The law gives primacy to the buyer's TDS under 194Q; where the buyer deducts under 194Q, the seller is generally not required to collect TCS under 206C(1H) on the same transaction.
Related Terms in India GST
TDS Section 192
The provision under which an employer deducts tax at source from salary based on the employee's estimated annual income and chosen tax regime. Unlike most TDS sections it has no flat rate — tax is deducted at the employee's average slab rate over the year.
TDS Section 194A
The provision for deducting tax at source on interest other than interest on securities — for example interest paid by banks on deposits or by businesses on loans — above a prescribed threshold.
TDS Section 195
The provision governing deduction of tax at source on payments to non-residents in India. Rates depend on the nature of income and any applicable Double Taxation Avoidance Agreement, and a reporting form is required for remittances abroad.
TCS Section 206C
The provision requiring sellers of specified goods — and, under 206C(1H), sellers above a turnover limit on large sales of goods — to collect tax at source from buyers. The collected tax is credited to the buyer against their tax liability.
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