TL;DR for CAs
- 194Q applies to buyers with turnover above Rs. 10 crore in the preceding FY.
- TDS at 0.1% on purchase of goods exceeding Rs. 50 lakh from a resident seller.
- Coordinate carefully with Section 206C(1H) TCS.
What it is
Section 194Q brings purchase of goods under the TDS net for specified buyers.
Who it applies to
Buyers whose total sales/gross receipts/turnover exceed Rs. 10 crore in the preceding financial year.
Key provisions
- Threshold: Rs. 50 lakh per seller
- Rate: 0.1% (5% without PAN)
- Timing: credit or payment, whichever earlier
- Interaction with 206C(1H)
Practical tips for CAs
Track cumulative purchases in ERP by vendor. Prefer 194Q over 206C(1H) where buyer is liable. File Form 26Q correctly.
Common mistakes
Not tracking FY cumulative purchases; confusing 194Q vs 206C(1H); wrong challan mapping.
For general guidance only. Verify with the latest Finance Act, GST notifications, and ICAI guidance notes before advising clients.