You might be confused as to which Section (206C1(H) or 194Q) to apply to your transaction if:
In such cases, your customer must apply TDS according to Section 194Q as per the latest circular released by the Central Board of Direct Taxes. If your customer has applied TDS as per Section 194Q to a transaction, you do not have to apply TCS as per Section 206C1(H) to the same transaction.
However, if you have already applied the TCS as per Section 206C1(H) to a transaction before the customer could apply TDS as per Section 194Q, customers do not have apply TDS according to Section 194Q to the same transaction.
You can also preview your invoice payment to check if your customer has already applied TDS according to Section 194Q. If the customer has not applied TDS as per Section 194Q to transaction, you can go ahead and apply TCS as per Section 2061(H) to the transaction.
Let’s take a look at a few examples down below to know when to apply TDS according to section 194Q:
|Customer’s Turnover||Vendor’s Turnover||Sales Amount||Apply Section 194Q||Apply Section 206C 1H|
|9 Cr||15 Cr||55 Lakhs||Not Applicable (Buyer’s turnover is not > 9 Cr)||Applicable|
|15 Cr||9 Cr||55 Lakhs||Applicable||Not Applicable (Seller’s turnover < 10 Crore)|
|15 Cr||15 Cr||55 Lakhs||Applicable||Not Applicable (As Section 194Q has already been deducted)|
|15 Cr||15 Cr||55 Lakhs||Not Applicable (As Buyer has failed to deduct TCS)||Applicable|
and GST filing.