62 How to compute tax to be deducted under section 194Q Income subject to tax deduction under section 194Q 62.1 If the following conditions are satisfied, then tax is deductible under section 194Q – 1. Payer is “buyer” of goods. 2. Payment/credit is on or after July 1, 2021. 3. Payment/credit pertains to purchase of goods from seller. 4. Aggregate payment/credit during the financial year exceeds Rs. 50 lakh. If the above conditions are satisfied, the buyer is required to deduct tax at source under section 194Q. 62.1-1 When tax is not deductible - Tax is not deductible under section 194Q if the following cases – Cases when TDS under section 194Q not applicable
Comments
Case 1 - If tax is deductible under any other section
If tax is deductible under any other section, then tax shall be deducted under that section and not under section 194Q. Even when tax is deductible under any other section (but not actually deducted by the payer), TDS provisions of that section will apply and not TDS under section 194Q.
Case 2 - If tax is collectible under the provisions of section 206C [but other than sub-section (1H)]
If a particular transaction is covered by TCS provisions of section 206C [other than sub-section (1H)], then tax will be collected by the seller (and tax is not deductible by the buyer under section 194Q). If a particular transaction is covered by section 194Q as well as section 206C(1H), then TDS under section 194Q will apply and not TCS under section 206C(1H).
62.1-2 Removing any difficulty - If any difficulty arises in giving effect to the provisions of this section, the Board may, with the approval of the Central Government, issue guidelines for the purpose of removing the difficulty. These guidelines shall be laid before each House of Parliament 545
