Pankaj Aneja, Executive Partner, Taxation on tax withholding on buying goods – Section 194Q
Effective July 1st of this year, a fresh element of compliance comes into play for businesses. This relates to the requirement of withholding tax on purchase of goods where the buyer would need to withhold at 0.1% on high value purchases from vendors. This note aims to capture the key elements of the newly enacted provisions (section 194Q) under the income tax act 1961
This article outlines the applicability of the requirement on the Deductor, the Deductee and the Rate of Tax. Also outlined are the provisions of section 194Q with regards to GST, PAN, Etc, Non-Compliance consequences including the failure to deduct or the failure to deduct and deposit, An illustration of various circumstances ranging from the amounts subject to withholding and whether or not there is withholding, the compliance exemption with categories of taxpayers that are exempted and the Impact of Section 194Q on various sectors including the automobile sector and other consumable sectors that collect TCS
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