Insertion of section 194Q in the Income Tax Act

Brief Description

Any person, being a buyer who is responsible for paying any sum to any seller (being a resident) for purchase of any goods (including capital goods), where the value or aggregate of such values, exceeds ₹50 lakhs in any P.Y., shall deduct TDS @ 0.1% (5% in case PAN is not furnished) on the purchase value exceeding ₹50 lakhs.


This section is applicable only when purchases are made from a resident seller, hence, no TDS shall be deducted in case of imports.


The provisions of this section shall not apply to transactions where:

  • tax is deductible under any other section
  • tax is collectible under section 206C other than a transaction to which sub-section (1H) of section 206C applies

Rate of TDS: 0.1% (5% in case PAN is not furnished) of the purchase value exceeding ₹50 lakhs.

Time of deduction:

Earlier of the following:

  • At the time of credit of such sum to the account (even if Suspense A/c) of the seller
  • At the time of payment by any mode

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