{"id":12794,"date":"2021-06-13T02:18:15","date_gmt":"2021-06-12T20:48:15","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=12794"},"modified":"2025-02-01T15:08:24","modified_gmt":"2025-02-01T09:38:24","slug":"analysis-comparison-of-section-194q-and-206c-1h","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/analysis-comparison-of-section-194q-and-206c-1h\/","title":{"rendered":"Analysis &#038; Comparison of Section 194Q &#038; 206C (1H)"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d10fa2c63f0\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d10fa2c63f0\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/analysis-comparison-of-section-194q-and-206c-1h\/#TDS_on_purchase_of_goods_Section_194Q_Vs_TCS_on_Sale_of_goods_Section_206C_1H\" title=\"TDS on purchase of goods Section 194Q V\/s\u00a0 TCS on Sale of goods Section 206C (1H):\">TDS on purchase of goods Section 194Q V\/s\u00a0 TCS on Sale of goods Section 206C (1H):<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/analysis-comparison-of-section-194q-and-206c-1h\/#TDS_on_purchase_of_goods_Section_194Q_Vs_TCS_on_Sale_of_goods_Section_206C_1H-2\" title=\"TDS on purchase of goods Section 194Q V\/s\u00a0 TCS on Sale of goods Section 206C (1H):\">TDS on purchase of goods Section 194Q V\/s\u00a0 TCS on Sale of goods Section 206C (1H):<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/analysis-comparison-of-section-194q-and-206c-1h\/#TDS_us_194Q_TDS_on_purchase_of_goods_and_TCS_US_206C_1H_TCS_on_Sale_of_goods_Interaction\" title=\"TDS u\/s 194Q (TDS on purchase of goods) and TCS U\/S 206C (1H) (TCS on Sale of goods) Interaction:\">TDS u\/s 194Q (TDS on purchase of goods) and TCS U\/S 206C (1H) (TCS on Sale of goods) Interaction:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/analysis-comparison-of-section-194q-and-206c-1h\/#Basis_of_comparison\" title=\"Basis of comparison\">Basis of comparison<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/analysis-comparison-of-section-194q-and-206c-1h\/#TDS_on_purchase_of_goods_Section_194Q\" title=\"TDS on purchase of goods \n[Section 194Q]\">TDS on purchase of goods \n[Section 194Q]<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/analysis-comparison-of-section-194q-and-206c-1h\/#TCS_on_Sale_of_goods_Section_206C1H\" title=\"TCS on Sale of goods \n[Section 206C(1H)]\">TCS on Sale of goods \n[Section 206C(1H)]<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/analysis-comparison-of-section-194q-and-206c-1h\/#Priority_between_TDS_194Q_or_TCS_206C1H\" title=\"Priority between TDS 194Q or TCS 206C(1H)\">Priority between TDS 194Q or TCS 206C(1H)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/analysis-comparison-of-section-194q-and-206c-1h\/#Bill_To_Bill_Bifurcation_of_receipts_is_not_required\" title=\"Bill To Bill Bifurcation of receipts is not required\">Bill To Bill Bifurcation of receipts is not required<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/analysis-comparison-of-section-194q-and-206c-1h\/#Important_TDS_Update\" title=\"Important TDS Update\">Important TDS Update<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Comparison-of-194Q-and-206C-1H..jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-12795\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Comparison-of-194Q-and-206C-1H..jpg\" alt=\"Comparison of 194Q and 206C (1H)\" width=\"1280\" height=\"720\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Comparison-of-194Q-and-206C-1H..jpg 1280w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Comparison-of-194Q-and-206C-1H.-300x169.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Comparison-of-194Q-and-206C-1H.-1024x576.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Comparison-of-194Q-and-206C-1H.-768x432.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Comparison-of-194Q-and-206C-1H.-800x450.jpg 800w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"TDS_on_purchase_of_goods_Section_194Q_Vs_TCS_on_Sale_of_goods_Section_206C_1H\"><\/span><span style=\"color: #ff0000;\"><strong>TDS on purchase of goods Section 194Q V\/s\u00a0 TCS on Sale of goods Section 206C (1H):<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"color: #000080;\"><strong>Q.: \u00a0Is the new section mentioned u\/s 206C(1H)?<\/strong><\/span><\/p>\n<ul>\n<li>The new TCS statutes went into effect on 1 October 2020, and if your turnover was more than 10 crores in the past financial year, i.e. the year ended 31 March 2020,<\/li>\n<li>you will have to collect and deposit TCS on your receipts from sales of goods from buyers who paid you more than Rs. 50 lakhs as sale consideration during the current financial year.<\/li>\n<li>The TCS is due on any receipt that is larger than 50 lakhs and is received after October 1, 2020. The TCS rate is 0.1 percent, and due to the current Corona Pandemic, a 25% discount has been applied to this tax rate until March 31, 2021, making the effective rate 0.075 percent.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Q.: \u00a0Is the new section mentioned u\/s 194Q\u00a0 TDS on purchases of goods?<\/strong><\/span><\/p>\n<p><span style=\"color: #ff9900;\"><strong>Person Responsible for Deducting TDS<\/strong><\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-16372\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Gradient53-800x419-1-300x157.png\" alt=\"Applicability of Section 194Q\" width=\"951\" height=\"497\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Gradient53-800x419-1-300x157.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Gradient53-800x419-1-768x402.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Gradient53-800x419-1.png 800w\" sizes=\"(max-width: 951px) 100vw, 951px\" \/><\/p>\n<p>Basically Buyer is responsible for paying to any resident for the <em>purchase of goods of the value or aggregate of such value in excess of INR 50 Lakh<\/em> in any last year is liable to deduct TDS.<\/p>\n<p><span style=\"color: #ff9900;\"><strong>Applicability of Section 194Q<\/strong><\/span><\/p>\n<ul>\n<li>The provisions of this section will be applicable to the Buyer if the sale <em>of Buyer is more than INR 10 Crore during the FY immediately preceding the FY in which the purchase takes place.\u00a0<\/em><\/li>\n<li>Section 194Q requires a buyer with a turnover, gross revenues, or total sales of more than Rs. 10 crores in the financial year immediately preceding the relevant financial year to deduct tax at a rate of 0.1 percent on the value exceeding Rs. 50 lakhs at the time of: \u2013<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-16369 aligncenter\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/194Q-300x242.png\" alt=\"194Q\" width=\"420\" height=\"339\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/194Q-300x242.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/194Q.png 600w\" sizes=\"(max-width: 420px) 100vw, 420px\" \/><\/p>\n<p><span style=\"color: #ff9900;\">Rate of TDS in case Purchase\u00a0of goods<\/span><\/p>\n<ul>\n<li>In case the Seller has PAN: 0.1%<\/li>\n<li>In case the Seller does not has PAN: 5%<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-16370 aligncenter\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/provisions-of-Section-194Q-shall-apply-on-the-transactions-300x122.png\" alt=\"provisions of Section 194Q shall apply on the transactions\" width=\"578\" height=\"235\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/provisions-of-Section-194Q-shall-apply-on-the-transactions-300x122.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/provisions-of-Section-194Q-shall-apply-on-the-transactions.png 580w\" sizes=\"(max-width: 578px) 100vw, 578px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"TDS_on_purchase_of_goods_Section_194Q_Vs_TCS_on_Sale_of_goods_Section_206C_1H-2\"><\/span><span style=\"color: #000080;\"><strong>TDS on purchase of goods Section 194Q V\/s\u00a0 TCS on Sale of goods Section 206C (1H):<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The buyer has the primary and main obligation to deduct the tax under Section 206C, and no tax shall be collected on the transaction (1H). Nevertheless, the seller is accountable for collecting the tax if the buyer fails to do so.<\/p>\n<p>If a transaction is subject to both TDS and TDS under section 194Q, the TDS under section 194Q will apply. TDS u\/s 194Q is not applicable if TCS is eligible to be collected under any other provisions of Section 206C.<\/p>\n<p>Read also : <strong><a href=\"https:\/\/carajput.com\/learn\/nsdl-extension-of-qtr-tdstcs-statement-filing-dates-for-4-quarter-of-fy-201920-until-30-june.html\">Extention of TDS\/TCS statement filing Date<\/a><\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"TDS_us_194Q_TDS_on_purchase_of_goods_and_TCS_US_206C_1H_TCS_on_Sale_of_goods_Interaction\"><\/span><span style=\"color: #000080;\"><strong>TDS u\/s 194Q (TDS on purchase of goods) and TCS U\/S 206C (1H) (TCS on Sale of goods) Interaction:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>So far, we&#8217;ve gone through in detail the newly added TDS rules proposed by Finance Act 2021 u\/s 194Q, which will take effect on July 1, 2021.<\/li>\n<li>As previously stated, the provisions of TCS u\/s 206C(1H) added by Finance Act 2020, which took effect on October 1, 2020, are identical in every way to those that apply to sales of products and must be collected by the seller.<\/li>\n<li>As a result, whenever the value of the sale\/purchase exceeds Rs.50 lakhs in a financial year, both TDS u\/s 194Q and TCS u\/s 206C(1H) will apply to the same transaction.<\/li>\n<li>Finance Act 2020, w.e.f. 1-10-2020, included Sec 206C(1H) for the first time. TDS on Purchase of Goods is regulated in the Finance Act of 2021. Section 194Q will become effective on July 1, 2021.<\/li>\n<li>If we try to establish a clear distinction between these two regulations, Section 206C(1H) casts responsibility of collecting TCS on Sale of Goods on Seller and Section 194Q casts responsibility of deducting TDS on Buyer in case of Purchase of Goods<\/li>\n<li>Section 206C(1H) provides a clear exclusion for TCS applicability in cases where TDS has already been deducted by the buyer when making payment for the purchase of goods.<\/li>\n<li>Taking these two provisions of TDS and TCS into account, we are attempting to identify possible practical scenarios in which the TDS\/TCS provisions will become applicable for a business concern.<\/li>\n<li>The influence of TDS and TCS on the purchase and sale of goods is discussed in the following paragraphs.<\/li>\n<\/ul>\n<p>More read for related blogs are: <strong><a href=\"https:\/\/carajput.com\/blog\/new-revise-tds-tcs-return-filing-due-date-payment-due-date\/\">New revise TDS\/TCS due date for filing Return and Payment for the year 2020<\/a><\/strong><\/p>\n<p><span style=\"color: #000080;\"><strong>Q.: What should you do if TDS is required to be deducted under another section and TDS u\/s 194Q also applies to a transaction?<\/strong><\/span><\/p>\n<p>The provisions of Section 194Q are not applicable if TDS is required to be deducted under any other section of the Income Tax Act.<\/p>\n<p><span style=\"color: #000080;\"><strong><em>Comparison of 194Q and 206C (1H):<\/em><\/strong><\/span><\/p>\n<table width=\"103%\">\n<tbody>\n<tr>\n<td width=\"27%\">\n<h3><span class=\"ez-toc-section\" id=\"Basis_of_comparison\"><\/span><span style=\"color: #000080;\"><strong>Basis of comparison<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/td>\n<td width=\"30%\">\n<h3><span class=\"ez-toc-section\" id=\"TDS_on_purchase_of_goods_Section_194Q\"><\/span><a href=\"https:\/\/www.caindelhiindia.com\/blog\/faqs-tds-on-purchases-section-194q\/\"><span style=\"color: #000080;\"><strong>TDS on purchase of goods<\/strong><strong><br \/>\n[Section 194Q]<\/strong><\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/td>\n<td width=\"42%\">\n<h3><span class=\"ez-toc-section\" id=\"TCS_on_Sale_of_goods_Section_206C1H\"><\/span><span style=\"color: #000080;\"><strong>TCS on Sale of goods<\/strong><strong><br \/>\n[Section 206C(1H)]<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"27%\">Who is liable for deduction\/collection<\/td>\n<td width=\"30%\">Buyer is liable to deduct the tax<\/td>\n<td width=\"42%\">Seller is liable to collect the tax<\/td>\n<\/tr>\n<tr>\n<td width=\"27%\">Turnover limit of deductor or collector<\/td>\n<td width=\"30%\">The total sales, gross receipts or turnover of the buyer from the business should exceed Rs. 10 crores during the financial year immediately preceding the financial year in which such goods are purchased<\/td>\n<td width=\"42%\">The total sales, gross receipts or turnover of the collector from the business should exceed Rs. 10 crores during the financial year immediately preceding the financial year in which such goods are sold<\/td>\n<\/tr>\n<tr>\n<td width=\"27%\">Effective date<\/td>\n<td width=\"30%\">1<sup>st<\/sup>\u00a0July 2021<\/td>\n<td width=\"42%\">1<sup>st<\/sup>\u00a0October 2020<\/td>\n<\/tr>\n<tr>\n<td width=\"27%\">Rate<\/td>\n<td width=\"30%\">0.1%<\/td>\n<td width=\"42%\">0.1% (0.075% for FY 2020-21)<\/td>\n<\/tr>\n<tr>\n<td width=\"27%\">Amount on which tax to be deducted\/collected<\/td>\n<td width=\"30%\">On the amount of purchase in excess of Rs. 50 lakhs<\/td>\n<td width=\"42%\">On the amount of sale consideration received in excess of Rs. 50 lakhs<\/td>\n<\/tr>\n<tr>\n<td width=\"27%\">PAN not available<\/td>\n<td width=\"30%\">5%<\/td>\n<td width=\"42%\">1%<\/td>\n<\/tr>\n<tr>\n<td width=\"27%\">Time of deduction\/collection<\/td>\n<td width=\"30%\">At the time of credit or payment, whichever is earlier<\/td>\n<td width=\"42%\">At the time of receipt<\/td>\n<\/tr>\n<tr>\n<td width=\"27%\">Exclusions<\/td>\n<td width=\"30%\">Not applicable if<\/p>\n<p>a.\u00a0\u00a0 Tax is deductible under other provisions of the act<\/p>\n<p>b.\u00a0\u00a0 Tax is collectible under 206C other than 206C (1H)<\/td>\n<td width=\"42%\">If Buyer is<\/p>\n<p>a.\u00a0 Importer of goods<\/p>\n<p>b.\u00a0 Central\/State Government, Local Authority<\/p>\n<p>c.\u00a0\u00a0 An embassy, High Commission, legation, commission, consulate and trade representation of a foreign state<\/td>\n<\/tr>\n<tr>\n<td width=\"27%\">Preference to be given<\/td>\n<td width=\"30%\">Purchaser is first liable to deduct the tax if the transaction could be subject to both provision<\/td>\n<td width=\"42%\">Seller shall be liable to collect the tax only if the purchaser is not liable to deduct the tax or purchaser failed to deduct tax<\/td>\n<\/tr>\n<tr>\n<td width=\"27%\">When to deposit\/collect<\/td>\n<td width=\"30%\">Tax so deducted shall be deposited with government by 7th day of subsequent month<\/td>\n<td width=\"42%\">Tax so collected shall be deposited with government by 7th day of subsequent month<\/td>\n<\/tr>\n<tr>\n<td width=\"27%\">Quarterly statement to be filed<\/td>\n<td width=\"30%\">26Q<\/td>\n<td width=\"42%\">27EQ<\/td>\n<\/tr>\n<tr>\n<td width=\"27%\">Certificate to be issued to seller\/buyer<\/td>\n<td width=\"30%\">FORM 16A<\/td>\n<td width=\"42%\">FORM 27D<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ul>\n<li>Please note that if the Buyer&#8217;s PAN is not provided, the rate under section 206(1H) will apply.<\/li>\n<li>It&#8217;s also worth noting that Section 194Q doesn&#8217;t differentiate between capital goods and stock in commerce. If the transaction meets the Section&#8217;s monetary limits, the provisions of Section 194Q will apply equally to the purchase of capital goods.<\/li>\n<\/ul>\n<h3><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Taxability-Computation.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-12803\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Taxability-Computation.png\" alt=\"\" width=\"974\" height=\"412\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Taxability-Computation.png 780w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Taxability-Computation-300x127.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Taxability-Computation-768x325.png 768w\" sizes=\"(max-width: 974px) 100vw, 974px\" \/><\/a><\/h3>\n<p>Read also : <strong><a href=\"https:\/\/carajput.com\/learn\/key-features-of-tcs-on-goods-sale-section-206c-1h-applicable-from-1-october-2020.html\">key features of TCS on goods sale section-206c<\/a><\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Priority_between_TDS_194Q_or_TCS_206C1H\"><\/span><span style=\"color: #000080;\"><strong>Priority between <a href=\"https:\/\/www.caindelhiindia.com\/blog\/faqs-tds-on-purchases-section-194q\/\">TDS 194Q<\/a> or TCS 206C(1H)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Yes, TDS 194Q will take precedence over TCS 206C(1H) if both provisions are applicable to the buyer and seller in the same transaction. It indicates that if a buyer is required to deduct TDS on a purchase transaction under Section 194Q,<\/li>\n<li>the seller is not permitted to collect TCS on the same transaction for which the buyer has already deducted TDS. In other words, the buyer is responsible for deducting the tax first and foremost.<\/li>\n<li>In theory, this is straightforward, but in practise, it will be difficult for both parties to determine whether the seller will collect TCS or whether the buyer must deduct TDS. Both parties must discuss and share their perspectives on applicability.<\/li>\n<\/ul>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Section-194Q-VS-Section-206C1H...jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-12800\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Section-194Q-VS-Section-206C1H...jpg\" alt=\"\" width=\"981\" height=\"654\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Section-194Q-VS-Section-206C1H...jpg 600w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Section-194Q-VS-Section-206C1H..-300x200.jpg 300w\" sizes=\"(max-width: 981px) 100vw, 981px\" \/><\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Bill_To_Bill_Bifurcation_of_receipts_is_not_required\"><\/span><span style=\"color: #000080;\"><strong>Bill To Bill Bifurcation of receipts is not required<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>In most circumstances, the seller keeps a running account of the buyer, in which payments are not tied to a specific sale invoice. As a result, in order to make the collector&#8217;s compliance easier,<\/li>\n<li>it should be highlighted that this TCS requirement will apply to the amount of all sale consideration received on or after<\/li>\n<li>1st October, 2020, without any adjustments for amounts received in connection with sales made prior to that date. requiring the collector to identify and exclude amounts received on or after the 1st of October, 2020 from amounts received on or after the 30th of September, 2020 would have imposed an unreasonable compliance burden on the collector as well as increased the risk of litigation.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong><u>Example 1<\/u><\/strong><\/span><\/p>\n<table width=\"103%\">\n<tbody>\n<tr>\n<td width=\"57%\"><span style=\"color: #000080;\"><strong>Particulars (assumed that the transactions have occurred after \u00a0\u00a0\u00a001<sup>st<\/sup>\u00a0July 2021)<\/strong><\/span><\/td>\n<td width=\"14%\"><span style=\"color: #000080;\"><strong>Scenario 1<\/strong><\/span><\/td>\n<td width=\"15%\"><span style=\"color: #000080;\"><strong>Scenario 2<\/strong><\/span><\/td>\n<td width=\"11%\"><span style=\"color: #000080;\"><strong>Scenario 3<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td width=\"57%\">Turnover of Seller (In cr.)<\/td>\n<td width=\"14%\">12<\/td>\n<td width=\"15%\">6<\/td>\n<td width=\"11%\">12<\/td>\n<\/tr>\n<tr>\n<td width=\"57%\">Turnover of Buyer (In cr.)<\/td>\n<td width=\"14%\">6<\/td>\n<td width=\"15%\">12<\/td>\n<td width=\"11%\">12<\/td>\n<\/tr>\n<tr>\n<td width=\"57%\">Sale of goods (In cr.) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(A)<\/td>\n<td width=\"14%\">2<\/td>\n<td width=\"15%\">2<\/td>\n<td width=\"11%\">2<\/td>\n<\/tr>\n<tr>\n<td width=\"57%\">Sales consideration paid during the year<\/p>\n<p>(In cr.)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(B)<\/td>\n<td width=\"14%\">1<\/td>\n<td width=\"15%\">1<\/td>\n<td width=\"11%\">1<\/td>\n<\/tr>\n<tr>\n<td width=\"57%\">Who is liable to deduct or collect tax?<\/td>\n<td width=\"14%\">Seller<\/td>\n<td width=\"15%\">Buyer<\/td>\n<td width=\"11%\">Buyer<\/td>\n<\/tr>\n<tr>\n<td width=\"57%\">Rate of Tax (Seller\/Buyer has provided PAN and has satisfied section 206AB)<\/td>\n<td width=\"14%\">0.1%<\/td>\n<td width=\"15%\">0.1%<\/td>\n<td width=\"11%\">0.1%<\/td>\n<\/tr>\n<tr>\n<td width=\"57%\">Amount on which tax to be deducted or collected (In Cr.)<\/p>\n<p>[Amount in excess of Rs. 50,00,000 is the taxable amount]<\/td>\n<td width=\"14%\">0.5<\/p>\n<p>[(B) \u2013 0.5]<\/td>\n<td width=\"15%\">1.5<\/p>\n<p>[(A) \u2013 0.5]<\/td>\n<td width=\"11%\">1.5<\/p>\n<p>[(A) \u2013 0.5]<\/td>\n<\/tr>\n<tr>\n<td width=\"57%\">Tax to be deducted or collected<\/td>\n<td width=\"14%\">5,000<\/td>\n<td width=\"15%\">15,000<\/td>\n<td width=\"11%\">15,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"color: #000080;\"><strong><u>Example 2<\/u><\/strong><\/span><\/p>\n<table width=\"106%\">\n<tbody>\n<tr>\n<td width=\"12%\"><span style=\"color: #000080;\"><strong>Seller\u2019s Turnover<\/strong><\/span><\/td>\n<td width=\"10%\"><span style=\"color: #000080;\"><strong>Buyer\u2019s Turnover<\/strong><\/span><\/td>\n<td width=\"15%\"><span style=\"color: #000080;\"><strong>Sale or purchase consideration for goods (after 1st July 2021)<\/strong><\/span><\/td>\n<td rowspan=\"2\" width=\"10%\"><span style=\"color: #000080;\"><strong>Taxable amount<\/strong><\/span><\/td>\n<td rowspan=\"2\" width=\"11%\"><span style=\"color: #000080;\"><strong>Seller \/ Buyer PAN<\/strong><\/span><\/td>\n<td rowspan=\"2\" width=\"8%\"><span style=\"color: #000080;\"><strong>TDS<\/strong><\/span><\/td>\n<td rowspan=\"2\" width=\"8%\"><span style=\"color: #000080;\"><strong>TCS<\/strong><\/span><\/td>\n<td rowspan=\"2\" width=\"9%\"><span style=\"color: #000080;\"><strong>Obligated Person to deduct or collect tax<\/strong><\/span><\/td>\n<td rowspan=\"2\" width=\"12%\"><span style=\"color: #000080;\"><strong>Relevant Section<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td width=\"12%\"><span style=\"color: #000080;\"><strong>(in Crores<\/strong><\/span><\/td>\n<td width=\"10%\"><span style=\"color: #000080;\"><strong>(in crores)<\/strong><\/span><\/td>\n<td width=\"15%\"><span style=\"color: #000080;\"><strong>(in lakhs)<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td width=\"12%\">7<\/td>\n<td width=\"10%\">15<\/td>\n<td width=\"15%\">55<\/td>\n<td width=\"10%\">5<\/td>\n<td width=\"11%\">Yes<\/td>\n<td width=\"8%\">0.10%<\/td>\n<td width=\"8%\">NA<\/td>\n<td width=\"9%\">Buyer<\/td>\n<td width=\"12%\">Section 194Q<\/td>\n<\/tr>\n<tr>\n<td width=\"12%\">15<\/td>\n<td width=\"10%\">6<\/td>\n<td width=\"15%\">59<\/td>\n<td width=\"10%\">9<\/td>\n<td width=\"11%\">Yes<\/td>\n<td width=\"8%\">NA<\/td>\n<td width=\"8%\">0.10%<\/td>\n<td width=\"9%\">Seller<\/td>\n<td width=\"12%\">Section 206C(1H)<\/td>\n<\/tr>\n<tr>\n<td width=\"12%\">18<\/td>\n<td width=\"10%\">16<\/td>\n<td width=\"15%\">65<\/td>\n<td width=\"10%\">15<\/td>\n<td width=\"11%\">Yes<\/td>\n<td width=\"8%\">0.10%<\/td>\n<td width=\"8%\">NA<\/td>\n<td width=\"9%\">Buyer<\/td>\n<td width=\"12%\">Section 194Q<\/td>\n<\/tr>\n<tr>\n<td width=\"12%\">5<\/td>\n<td width=\"10%\">11<\/td>\n<td width=\"15%\">53<\/td>\n<td width=\"10%\">3<\/td>\n<td width=\"11%\">No<\/td>\n<td width=\"8%\">5%<\/td>\n<td width=\"8%\">NA<\/td>\n<td width=\"9%\">Buyer<\/td>\n<td width=\"12%\">Section 194Q\/ 206AA<\/td>\n<\/tr>\n<tr>\n<td width=\"12%\">16<\/td>\n<td width=\"10%\">7<\/td>\n<td width=\"15%\">56<\/td>\n<td width=\"10%\">6<\/td>\n<td width=\"11%\">No<\/td>\n<td width=\"8%\">NA<\/td>\n<td width=\"8%\">5%<\/td>\n<td width=\"9%\">Seller<\/td>\n<td width=\"12%\">Section 206C(1H)\/ 206AA<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"color: #000080;\"><strong>Example 3 \u2013<\/strong><\/span><\/p>\n<p>Mr. A, a buyer with an annual revenue of INR 50 crores. Mr. A buys products valued INR 52 lakhs from Mr. B, a seller.<\/p>\n<p>The following is an analysis of the applicability of section 194Q in the current transaction:<\/p>\n<ul>\n<li>Because the buyer&#8217;s turnover exceeds INR 10 crores, the provisions of section 194Q apply.<\/li>\n<li>In addition, the customer has acquired things worth more than INR 50 lakhs.<\/li>\n<\/ul>\n<p>The buyer will be able to deduct TDS under section 194Q in the following way:<\/p>\n<table width=\"661\">\n<tbody>\n<tr>\n<td width=\"479\"><span style=\"color: #000080;\"><strong>Particulars<\/strong><\/span><\/td>\n<td width=\"182\"><span style=\"color: #000080;\"><strong>Amount<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td width=\"479\">Taxable amount (INR 52 Lakhs \u2013 INR 50 Lakhs)<\/td>\n<td width=\"182\">INR 2 Lakhs<\/td>\n<\/tr>\n<tr>\n<td width=\"479\">Rate at which TDS deductible under section 194Q<\/td>\n<td width=\"182\">0.1%<\/td>\n<\/tr>\n<tr>\n<td width=\"479\">Amount of TDS deductible<\/td>\n<td width=\"182\">INR 200<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"color: #000080;\"><strong>Example 4 \u2013<\/strong><\/span><\/p>\n<p>Mr. X, a buyer, has INR 40 crores in gross receipts. Mr. X purchases goods worth INR 60 lakhs from Mr. Y. Notably, Mr. Y, a seller, has a revenue of INR 15 Crores.<\/p>\n<p>The following is a description of how the provisions of Section 194Q were applied in the above transaction:<\/p>\n<ul>\n<li>Section 194Q provisions apply if the buyer&#8217;s gross receipts exceed INR 10 crores.<\/li>\n<li>However, if a seller&#8217;s turnover exceeds INR 10 crores, the provisions of section 206C(1H) become applicable.<\/li>\n<li>The applicability of TDS\/TCS provisions is examined below.<\/li>\n<\/ul>\n<p>Because both provisions, namely <a href=\"https:\/\/www.caindelhiindia.com\/blog\/faqs-tds-on-purchases-section-194q\/\">sections 194Q<\/a> and 206C(1H), are applicable. TDS is only deductible under Section 194Q, as shown in the table below.<\/p>\n<table width=\"613\">\n<tbody>\n<tr>\n<td width=\"450\"><span style=\"color: #000080;\"><strong>Particulars<\/strong><\/span><\/td>\n<td width=\"126\"><span style=\"color: #000080;\"><strong>Amount<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td width=\"450\">Taxable amount (INR 60 Lakhs \u2013 INR 50 Lakhs)<\/td>\n<td width=\"126\">INR 10 Lakhs<\/td>\n<\/tr>\n<tr>\n<td width=\"450\">Rate at which TDS deductible under\u00a0<strong>section 194Q<\/strong><\/td>\n<td width=\"126\">0.1%<\/td>\n<\/tr>\n<tr>\n<td width=\"450\">Amount of TDS deductible<\/td>\n<td width=\"126\">INR 1000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"Important_TDS_Update\"><\/span><strong>Important TDS Update<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-28499\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/TCS.jpg\" alt=\"Important TDS Update\nTCS on sale of Goods under section 206(1H) will NOT APLLICABLE from 1.April 2025\" width=\"1280\" height=\"1049\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/TCS.jpg 1280w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/TCS-300x246.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/TCS-1024x839.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/TCS-768x629.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/TCS-800x656.jpg 800w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/p>\n<p>TCS on sale of Goods under section 206(1H) will NOT APLLICABLE from 1.April 2025<\/p>\n<p>Read also : <strong><a href=\"https:\/\/carajput.com\/learn\/new-tds-deduction-provision-prevent-cash-transactions-of-more-than-1-crore-section-194n.html\">New TDS deduction No cash transactions exceeding 1 Crore -Section 194N<\/a><\/strong><\/p>\n<p>For query or help, contact:\u00a0info@caindelhiindia.com or call at +91 9555 555 480<\/p>\n","protected":false},"excerpt":{"rendered":"<p>TDS on purchase of goods Section 194Q V\/s\u00a0 TCS on Sale of goods Section 206C (1H): Q.: \u00a0Is the new section mentioned u\/s 206C(1H)? The new TCS statutes went into effect on 1 October 2020, and if your turnover was more than 10 crores in the past financial year, i.e. the year ended 31 March &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[9941],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/12794"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=12794"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/12794\/revisions"}],"predecessor-version":[{"id":28500,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/12794\/revisions\/28500"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=12794"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=12794"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=12794"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}