Section 194Q: Definition, Meaning & Guide for Indian Businesses

Section 194Q requires TDS at 0.1 percent on purchase of goods if your business turnover exceeded 10 crore in the previous FY and annual purchases from one seller exceed 50 lakh.

What is Section 194Q?

Section 194Q was inserted by the Finance Act 2021. It requires buyers whose turnover exceeded 10 crore rupees in the previous financial year to deduct 0.1 percent TDS on purchases from any seller where annual aggregate purchases exceed 50 lakh rupees. TDS applies on the amount above 50 lakh. Without PAN, the rate jumps to 5 percent.