What is sec 194Q?

Question

What is sec 194Q?

Accepted Answer

Sec 194Q refers to the provision under the Income Tax Act that requires buyers to deduct TDS on purchase of goods above a specified threshold.

Sec 194Q is a provision under the Income Tax Act of India.
It requires buyers to deduct tax at source (TDS) on purchase of goods.
The provision applies to buyers whose total turnover exceeds a specified threshold.
The threshold for applicability is INR 50 crores in the previous financial year.
Buyers need to deduct TDS at the rate of 0.1% on the purchase amount exceeding INR 50 lakhs.
The TDS deducted needs to be remitted to the government within the specified time frame.
Sec 194Q aims to widen the tax base and ensure better compliance in the purchase of goods.

Accepted Answer

Section 194Q of the Income Tax Act, 1961, is related to Tax Deduction at Source (TDS) on payment of certain specified goods or services. It mandates that a buyer (whose total sales, gross receipts, or turnover exceeds Rs. 10 crores in the previous financial year) is required to deduct TDS at the rate of 0.1% on the value of goods or services purchased from a resident seller, exceeding Rs. 50 lakhs in a financial year. This provision aims to widen the tax net and ensure compliance by sellers.

What is sec 194Q?

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