Section 194Q: TDS on purchase of goods
Section 194Q of the Income-tax Act, 1961 covers TDS on purchase of goods. From 1 April 2026 the same deduction sits in Section 393(1), Table Sl. No. 8(ii), Income-tax Act, 2025. The rate, threshold and conditions below were read from incometaxindia.gov.in on 13 October 2026.
Section 194Q at a glance
| Nature of payment | Sum exceeding Rs 50 lakh for purchase of any goods |
|---|---|
| Who deducts | Any person being a buyer |
| Threshold | Rs 50 lakh; tax deducted only on the sum exceeding Rs 50 lakh (Note 1(b)) |
| Income-tax Act, 2025 | Section 393(1), Table Sl. No. 8(ii), Income-tax Act, 2025 |
| Payee without PAN | Highest of the rate below, the rates in force, or 5% |
TDS rate
| Payee | Rate |
|---|---|
| Resident seller | 0.1% (on amount above Rs 50 lakh) |
Rates exclude surcharge and health and education cess.
Conditions and exceptions
- Does not apply to a transaction on which tax is deductible or collectible under any other provision (Note 1(a)).
- The 1961-Act turnover condition for the buyer (Rs 10 crore) is not shown in the table cell; not verified from the primary page.
Which Act applies to your payment
The 1961 Act governs a payment if it was credited or paid on or before 31 March 2026, whichever happened first. If both happen on or after 1 April 2026, the 2025 Act applies.
Source and verification
Income Tax Department: Section 393(1), Table Sl. No. 8(ii), Income-tax Act, 2025 →
Last verified on 13 October 2026. Finance Acts change TDS rates and thresholds; check the source before you deduct. This is general information, not advice for your situation.
Related
Frequently asked questions
What is the TDS rate under section 194Q?
0.1% (on amount above Rs 50 lakh) for resident seller. Rates exclude surcharge and cess.
What is the threshold for TDS under section 194Q?
Rs 50 lakh; tax deducted only on the sum exceeding Rs 50 lakh (Note 1(b)). Below this, no tax is deducted.
What is section 194Q called under the new Income-tax Act?
From 1 April 2026 it is Section 393(1), Table Sl. No. 8(ii), Income-tax Act, 2025. The e-filing portal's TDS FAQ says the rates and thresholds were carried over; the section number is what changed.
What if the payee has no PAN?
Section 397 of the 2025 Act requires deduction at the highest of the rate above, the rates in force, or 5%.
More on India compliance
Indian GST: CGST, SGST, IGST & Registration
Thresholds, GSTIN format, place of supply, and the rules that decide whether you charge CGST + SGST or IGST.
Read gst basicsHSN & SAC Codes for GST Invoices
How HSN (goods) and SAC (services) codes work, how many digits to print, and how HelloBooks fills them automatically.
Read hsn & sac codesGST E-Invoicing: IRN, QR & IRP Workflow
Turnover thresholds, the IRN/QR lifecycle, the 24-hour cancellation window, and how HelloBooks pushes invoices to the IRP.
Read e-invoicingE-Way Bill Rules, Distance Limits & Cancellation
When an EWB is required, validity periods by distance, Part A vs Part B fields, and the HelloBooks generation flow.
Read e-way billGSTR-1, 3B, 2B & 9 Returns: Filing Guide
What each return covers, the due dates and late fees, and how HelloBooks builds them from your books.
Read gstr returnsGST Updates 2025-26: What Changed for Small Businesses
GST 2.0 rates, GSTR-3B locking, IMS, the 3-year bar, GSTAT, and what the 57th Council (8 Oct 2026) proposed. Sourced and dated.
Read gst updatesMonthly GST Collections in India
Gross GST collected each month since April 2024, with year-on-year growth and a source for every number.
Read gst collectionsAIS Reconciliation: Match Your Annual Information Statement
Upload AIS JSON or PDF, match TDS and income entries to your books, and export the reconciliation report for ITR filing.
Read ais reconciliationAuthoritative sources
GST rules change frequently. Always verify the current position with the official GSTN sources below before filing.
- GST Portal — gst.gov.inOfficial GSTN portal for registration, returns, and payments.
- CBIC GST — cbic-gst.gov.inCentral Board of Indirect Taxes & Customs — Acts, rules, notifications, and circulars.
- E-Invoice Portal — einvoice1.gst.gov.inInvoice Registration Portal (IRP) for IRN generation and e-invoice schema.
- E-Way Bill Portal — ewaybillgst.gov.inNational e-way bill portal for EWB generation, cancellation, and verification.
File GSTR-1 and GSTR-3B free with HelloBooks
The Free Plan is ₹0: it files unlimited GSTR-1 and GSTR-3B returns for one GSTIN and reconciles GSTR-2B, with no credit card and no expiry. Pro at ₹499/month adds GSTR-9 generated ready to file, e-invoicing and unlimited users.
GST filing included, no card · free GST filing software · GST due-date calendar · Talk to a human
Working with an accountant on HelloBooks
Free, vetted directory of independent firms. Every partnership tier is earned, never paid for — we verify credentials against the official registry before any profile goes live.