{"id":23189,"date":"2022-09-07T20:07:43","date_gmt":"2022-09-07T14:37:43","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=23189"},"modified":"2024-08-01T14:11:46","modified_gmt":"2024-08-01T08:41:46","slug":"all-about-section-206c1h","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/all-about-section-206c1h\/","title":{"rendered":"ALL ABOUT SECTION 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-69dc2f6561260\" 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-69dc2f6561260\"  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\/all-about-section-206c1h\/#ALL_ABOUT_SECTION_206C1H\" title=\"ALL ABOUT SECTION 206C(1H)\">ALL ABOUT 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\/all-about-section-206c1h\/#IMPORTANT_OBSERVATIONS_REGARDING_194Q\" title=\"IMPORTANT OBSERVATIONS REGARDING 194Q\">IMPORTANT OBSERVATIONS REGARDING 194Q<\/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\/all-about-section-206c1h\/#NON-COMPLIANCES_WITH_SECTION_194Q\" title=\"NON-COMPLIANCE&#8217;S WITH SECTION 194Q\">NON-COMPLIANCE&#8217;S WITH SECTION 194Q<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/all-about-section-206c1h\/#AUDIT_PROCEDURES\" title=\"AUDIT PROCEDURES\">AUDIT PROCEDURES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/all-about-section-206c1h\/#Read_More_about\" title=\"Read More about:\">Read More about:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/all-about-section-206c1h\/#New_TDS_deduction_No_cash_transactions_exceeding_1_Crore_-Section_194N\" title=\"New TDS deduction No cash transactions exceeding 1 Crore -Section 194N\">New TDS deduction No cash transactions exceeding 1 Crore -Section 194N<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/all-about-section-206c1h\/#Extention_of_TDSTCS_statement_filing_Date\" title=\"Extention of TDS\/TCS statement filing Date\">Extention of TDS\/TCS statement filing Date<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/all-about-section-206c1h\/#Read_More_about_key_features_of_TCS_on_goods_sale_section-206c\" title=\"Read More about key features of TCS on goods sale section-206c\">Read More about key features of TCS on goods sale section-206c<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"ALL_ABOUT_SECTION_206C1H\"><\/span><span style=\"color: #000080;\"><strong>ALL ABOUT SECTION 206C(1H)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<figure id=\"attachment_12800\" aria-describedby=\"caption-attachment-12800\" style=\"width: 971px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Section-194Q-VS-Section-206C1H...jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-12800\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/06\/Section-194Q-VS-Section-206C1H...jpg\" alt=\"Section-194Q-VS-Section-206C1H..\" width=\"971\" height=\"647\" 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: 971px) 100vw, 971px\" \/><\/a><figcaption id=\"caption-attachment-12800\" class=\"wp-caption-text\"><span style=\"color: #ffffff;\">Section-194Q-VS-Section-206C1H..<\/span><\/figcaption><\/figure>\n<table style=\"height: 480px;\" width=\"970\">\n<tbody>\n<tr>\n<td width=\"313\"><span style=\"color: #000080;\"><strong>BASIS<\/strong><\/span><\/td>\n<td width=\"168\"><span style=\"color: #000080;\"><strong>SECTION 194Q<\/strong><\/span><\/td>\n<td width=\"192\"><span style=\"color: #000080;\"><strong>SECTION 206C(1H)<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td width=\"313\">OBLIGATION<\/td>\n<td width=\"168\">BUYER<\/td>\n<td width=\"192\">SELLER<\/td>\n<\/tr>\n<tr>\n<td width=\"313\">TURNOVER LIMIT TO DETERMINE APPLICABILITY<\/td>\n<td width=\"168\">PREVIOUS YEAR TURNOVER\/ GROSS RECEIPTS OF BUYER EXCEEDS 1 0CR<\/td>\n<td width=\"192\">PREVIOUS YEAR TURNOVER\/\u00a0\u00a0 GROSS RECEIPTS OF SELLER EXCEEDS 10CR<\/td>\n<\/tr>\n<tr>\n<td width=\"313\">EFFECTIVE DATE<\/td>\n<td width=\"168\">1ST JULY, 2021<\/td>\n<td width=\"192\">1ST OCTOBER 2020<\/td>\n<\/tr>\n<tr>\n<td width=\"313\">THRESHOLD LIMIT<\/td>\n<td width=\"168\">PURCHASE IN EXCESS OF 50 LACS FROM EACH SELLER DURING THE YEAR<\/td>\n<td width=\"192\">SALE IN EXCESS OF 50 LACS TO EACH BUYER DURING THE YEAR<\/td>\n<\/tr>\n<tr>\n<td width=\"313\">TIME OF DEDUCTION\/ COLLECTION<\/td>\n<td width=\"168\">BILL OR PAYMENT WHICHEVER IS EARLIER<\/td>\n<td width=\"192\">AT THE TIME OF RECEIPT<\/td>\n<\/tr>\n<tr>\n<td width=\"313\">PRESCRIBED RATE<\/td>\n<td width=\"168\">0.10%<\/td>\n<td width=\"192\">0.10%<\/td>\n<\/tr>\n<tr>\n<td width=\"313\">HIGHER RATE WHERE PAN IS NOT AVAILABLE<\/td>\n<td width=\"168\">5%<\/td>\n<td width=\"192\">5%<\/td>\n<\/tr>\n<tr>\n<td width=\"313\">RETURN FORM<\/td>\n<td width=\"168\">26Q<\/td>\n<td width=\"192\">27EQ<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"color: #000080;\"><strong>In case, a transaction falls within the ambit of both the sections- 194Q and 206C(1H), the following treatment be done &#8211;<\/strong><\/span><\/p>\n<table style=\"height: 523px;\" width=\"970\">\n<tbody>\n<tr>\n<td width=\"325\"><strong>SITUATION<\/strong><\/td>\n<td width=\"348\"><strong><a href=\"https:\/\/carajput.com\/tds.php\">TDS\/ TCS APPLICABLE PROVISION<\/a><\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"325\">TURNOVER IN PRECEDING FY BUYER &gt;10 CR, SELLER&lt;10CR<\/td>\n<td width=\"348\">194Q: BUYER TO DEDUCT TDS<\/td>\n<\/tr>\n<tr>\n<td width=\"325\">TURNOVER IN PRECEDING FY BUYER &lt;10 CR, SELLER&gt;10CR<\/td>\n<td width=\"348\">206C(1H): SELLER TO COLLECT TCS<\/td>\n<\/tr>\n<tr>\n<td width=\"325\">TURNOVER IN PRECEDING FY BUYER &gt;10 CR, SELLER&gt;10CR<\/td>\n<td width=\"348\">194Q: BUYER TO DEDUCT TDS<\/td>\n<\/tr>\n<tr>\n<td width=\"325\">TURNOVER IN PRECEDING FY BUYER &lt;10 CR, SELLER&lt;10CR<\/td>\n<td width=\"348\">NOTHING APPLICABLE<\/td>\n<\/tr>\n<tr>\n<td width=\"325\">ADVANCE PAID BY BUYER ON OR AFTER 1ST JULY 2021<\/td>\n<td width=\"348\">194Q WILL BE APPLICABLE AS TRIGGER POINT FOR 1 94Q IS EARLIER OF PAYMENT OR CREDIT OF SUCH SUM TO THE SELLER<\/td>\n<\/tr>\n<tr>\n<td width=\"325\">ADVANCE PAID BY BUYER ON OR BEFORE 30TH JUNE 2021<\/td>\n<td width=\"348\">SELLER WILL COLLECT TCS ON SUCH TRANSACTION U\/S 206C(1H), SINC THE TRIGGER POINT FOR DEDUCTION OF TDS IS PAYMENT OR CREDIT WHICHEVER IS EARLIER. THUS, TDS DEDUCTED U\/S 194Q SHALL NOT BE APPLICABLE WHERE PAYMENTS ARE MADE BEFORE 30TH JUNE 2021.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"IMPORTANT_OBSERVATIONS_REGARDING_194Q\"><\/span><span style=\"color: #000080;\"><strong>IMPORTANT OBSERVATIONS REGARDING <a href=\"https:\/\/www.caindelhiindia.com\/blog\/faqs-tds-on-purchases-section-194q\/\">194Q<\/a><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>Just in case\u00a0the client\u00a0is in non-compliance under section 194Q then\u00a0the supplier is required to collect <a href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-tcs-amendments-nine-shall-be-effective-from-1-june-2015\/\">TCS<\/a> under section 206C(1H) on such transactions.<\/li>\n<li>In respect of FY 20-21, the aggregate value of purchase\u00a0shall be\u00a0calculated with effect from 1st April, 2021,\u00a0however, the provisions of\u00a0the section shall be applicable with effect from 1st July, 2021.<\/li>\n<li>For\u00a0the aim\u00a0of section 194Q, purchase\u00a0includes the purchase of capital goods as well.<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"NON-COMPLIANCES_WITH_SECTION_194Q\"><\/span><span style=\"color: #000080;\">NON-<span style=\"font-size: 18.72px;\">COMPLIANCE&#8217;S<\/span> WITH SECTION <a href=\"https:\/\/www.caindelhiindia.com\/blog\/faqs-tds-on-purchases-section-194q\/\">194Q<\/a><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>Section 40a(ia):\u00a0Just in case\u00a0of default u\/s 194Q, 30% of such purchase amount on which tax is deductible\u00a0shall be\u00a0disallowed under section 40a(ia).<\/li>\n<li>Section 201(1A): Just in case of default in deduction of tax or in depositing the tax after deduction, the assesses are going to be at risk of pay interest as per the following prescribed rate &#8211;<\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>@ 1% per month or a part of a month for default of non-deduction of TDS. The said period involves the period from the date from which such TDS be deductible, till the date on which such tax be actually deducted; and<\/li>\n<li>@ 1.5% per month or a part of a month for default of non-deposit of <a href=\"https:\/\/www.caindelhiindia.com\/blog\/?s=tds\">TDS deducted<\/a>. The said period involves the period from the date from which such TDS has been deducted, till the date on which such tax be truly paid<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ol start=\"3\">\n<li>Section 271C: Penalty is levied under this section just in case of failure to deduct tax at source, akin to the number of taxes which the person, who failed to deduct or collect tax, shall be imposed by the Joint Commissioner.<\/li>\n<\/ol>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-27113\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/09\/206C.jpg\" alt=\"194Q vs 206C\" width=\"927\" height=\"1080\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/09\/206C.jpg 927w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/09\/206C-258x300.jpg 258w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/09\/206C-879x1024.jpg 879w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/09\/206C-768x895.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/09\/206C-800x932.jpg 800w\" sizes=\"(max-width: 927px) 100vw, 927px\" \/><\/p>\n<h4><span class=\"ez-toc-section\" id=\"AUDIT_PROCEDURES\"><\/span><span style=\"color: #000080;\"><strong>AUDIT PROCEDURES<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ol>\n<li><span style=\"color: #ff9900;\"><strong>Reconciliation of sales and purchases with Form 26 AS<\/strong><\/span><\/li>\n<\/ol>\n<p style=\"padding-left: 40px;\">Before the introduction of sections 194Q and 206C(1H), sales and purchases of products were out of the purview of <a href=\"https:\/\/carajput.com\/tds.php\">TDS<\/a>\/ <a href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-tcs-amendments-nine-shall-be-effective-from-1-june-2015\/\">TCS<\/a>. However, now Form 26 AS is further audit evidence to verify\/ confirm the numerous revenues and buy of products transactions.<\/p>\n<ol start=\"2\">\n<li><span style=\"color: #ff9900;\"><strong>Implications in <a href=\"https:\/\/www.caindelhiindia.com\/service\/tax-audit\"><span style=\"color: #0000ff;\">tax audit<\/span><\/a><\/strong><\/span><\/li>\n<\/ol>\n<p style=\"padding-left: 40px;\">Under clause 34a of\u00a0the shape\u00a03CD, where auditor is required to\u00a0investigate\u00a0overall <a href=\"https:\/\/www.caindelhiindia.com\/service\/tds-return\"><span style=\"color: #0000ff;\">TDS<\/span><\/a>\/ <span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" href=\"https:\/\/www.caindelhiindia.com\/blog\/tds-tcs-amendments-nine-shall-be-effective-from-1-june-2015\/\">TCS<\/a> <\/span>compliances by the assessee, detailed reconciliation may\u00a0need to\u00a0run\u00a0for these newly added sections.<\/p>\n<ol start=\"3\">\n<li><span style=\"color: #ff9900;\"><strong>Implication on calculation of\u00a0income tax\u00a0provision and interest thereon, if any<\/strong><\/span><\/li>\n<\/ol>\n<p style=\"padding-left: 40px;\">In case of non-compliances with the provisions of these sections, disallowances, interest and penalty will be welcomes by the taxpayer.<\/p>\n<p style=\"padding-left: 40px;\">Auditors\u00a0are required to\u00a0diligently consider\u00a0the identical\u00a0for creation of provision for taxes\u00a0within the\u00a0books of account and also for the calculation of\u00a0income tax\u00a0liability and its consequent impacts in deferred taxes.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-22687\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/07\/TDS-Update-.jpg\" alt=\"TDS Update 2022\" width=\"1260\" height=\"999\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/07\/TDS-Update-.jpg 1260w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/07\/TDS-Update--300x238.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/07\/TDS-Update--1024x812.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/07\/TDS-Update--768x609.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/07\/TDS-Update--800x634.jpg 800w\" sizes=\"(max-width: 1260px) 100vw, 1260px\" \/><\/p>\n<h4><span class=\"ez-toc-section\" id=\"Read_More_about\"><\/span>Read More about:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<h4><span class=\"ez-toc-section\" id=\"New_TDS_deduction_No_cash_transactions_exceeding_1_Crore_-Section_194N\"><\/span><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><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<h4><span class=\"ez-toc-section\" id=\"Extention_of_TDSTCS_statement_filing_Date\"><\/span><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><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<h4><span class=\"ez-toc-section\" id=\"Read_More_about_key_features_of_TCS_on_goods_sale_section-206c\"><\/span><strong><a href=\"https:\/\/carajput.com\/learn\/key-features-of-tcs-on-goods-sale-section-206c-1h-applicable-from-1-october-2020.html\">Read More about key features of TCS on goods sale section-206c<\/a><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n","protected":false},"excerpt":{"rendered":"<p>ALL ABOUT SECTION 206C(1H) BASIS SECTION 194Q SECTION 206C(1H) OBLIGATION BUYER SELLER TURNOVER LIMIT TO DETERMINE APPLICABILITY PREVIOUS YEAR TURNOVER\/ GROSS RECEIPTS OF BUYER EXCEEDS 1 0CR PREVIOUS YEAR TURNOVER\/\u00a0\u00a0 GROSS RECEIPTS OF SELLER EXCEEDS 10CR EFFECTIVE DATE 1ST JULY, 2021 1ST OCTOBER 2020 THRESHOLD LIMIT PURCHASE IN EXCESS OF 50 LACS FROM EACH SELLER &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":[5169],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/23189"}],"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=23189"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/23189\/revisions"}],"predecessor-version":[{"id":27114,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/23189\/revisions\/27114"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=23189"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=23189"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=23189"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}