What is the applicability of TDS under Section 194Q?

  • If a taxpayer has a turnover of >INR 10 crores in the previous financial year or has reached a turnover of INR 10 crores in the current financial year, then Section 194Q becomes applicable on purchase of all goods or services.
  • TDS deduction happens for each vendor with whom purchases worth more than INR 50 lakhs are made.
  • The amount of deduction is 0.1% of the amount that exceeds INR 50 lakhs.

    Example: For purchases of goods/services worth INR 70 lakhs, then the deduction applicable under section 194Q is 0.1% of INR 20 lakhs (amount exceeding INR 50 lakhs) which is equal to INR 2000/-