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194Q
Section 194Q TDS Rate FY 2026-27
TDS on purchase of goods: rate, threshold, who deducts, and the new section number under the Income-tax Act 2025.
Quick answer
- TDS rate
- 0.1%
- Threshold
- Purchases from one seller above ₹50,00,000 in the year, by a buyer whose turnover exceeded ₹10 crore in the preceding year
- Old section (1961 Act)
- Section 194Q
- New section (2025 Act, from 1 Apr 2026)
- Section 393(1), Table Sl. No. 8(ii)
- Without PAN
- 5% if the seller does not furnish a valid PAN.
194Q TDS rate chart
| Nature of payment | Rate |
|---|---|
| Purchase of goods from a resident seller | 0.1%of the amount above ₹50 lakh in the year |
Who deducts and when
Who has to deduct
A buyer whose total sales, gross receipts or turnover from business exceeded ₹10 crore in the preceding financial year.
When to deduct
At the time of credit to the seller's account or payment, whichever is earlier.
Points to remember
- TDS applies only to the amount exceeding ₹50 lakh paid or credited to a single seller in the year.
- TCS on sale of goods under old Section 206C(1H) was omitted from 1 April 2025, so 194Q is now the only provision for such transactions.
- Where TDS is deducted on purchases at the time of credit, CBDT has clarified it is generally on the amount excluding GST. If tax is deducted on advance payment, it is on the full amount.
Worked example
A buyer with ₹25 crore turnover last year purchases ₹80 lakh of goods from one supplier in the year.
Amount above ₹50,00,000: ₹30,00,000. TDS at 0.1% = ₹3,000.
Section 194Q TDS calculator
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Applicable rate –
TDS amount ₹0
Net amount payable ₹0
Frequently Asked Questions
What is the TDS rate under Section 194Q?
0.1% of the amount above ₹50 lakh in the year for purchase of goods from a resident seller.
What is the threshold limit for TDS under 194Q?
Purchases from one seller above ₹50,00,000 in the year, by a buyer whose turnover exceeded ₹10 crore in the preceding year.
What is the new section for 194Q under the Income-tax Act 2025?
From 1 April 2026 the Income-tax Act 2025 replaces the 1961 Act. TDS on purchase of goods (old Section 194Q) is now covered by Section 393(1), Table Sl. No. 8(ii). The rate and threshold carried over unchanged.
Who has to deduct TDS under 194Q?
A buyer whose total sales, gross receipts or turnover from business exceeded ₹10 crore in the preceding financial year.
When should TDS under 194Q be deducted?
At the time of credit to the seller's account or payment, whichever is earlier.
What is the TDS rate under 194Q if PAN is not available?
5% if the seller does not furnish a valid PAN.
What is the due date for depositing TDS under 194Q?
Generally by the 7th of the following month. For tax deducted in March, the due date is 30 April. Government deductors paying without a challan must deposit on the same day.
What happens if TDS under 194Q is not deducted or deposited on time?
Interest is charged at 1% per month (or part of a month) from the date tax was deductible to the date it is deducted, and at 1.5% per month from deduction to deposit. Late filing fees and penalties can also apply, and for a business, 30% of the expense may be disallowed.
Is TDS under 194Q deducted on the full purchase value?
No. It is deducted at 0.1% only on the purchase value above ₹50 lakh from that seller in the year.
Does 194Q apply if TCS was collected by the seller?
TCS on sale of goods under old Section 206C(1H) was omitted from 1 April 2025, so for current years only the buyer's TDS under 194Q applies.
Section 393 table references are based on the Income-tax Act, 2025 as published. Verify the serial number against the official text before quoting it in a return or notice reply.
Other TDS sections
TDS on common payments
TDS on Rent
10% / 2%
TDS on Salary
Slab rates (average)
TDS on Purchase of Goods
0.1%
TDS on Property Purchase
1%
TDS on Sale of Property
1% (resident) / 12.5%+ (NRI)
TDS on Commission
2%
TDS on Professional Fees
10% / 2%
TDS on Contractor Payments
1% / 2%
TDS on Partners' Remuneration
10%
TDS on FD Interest
10%
TDS on GST (TDS under GST)
2% (1% CGST + 1% SGST, or 2% IGST)
TDS on Cash Withdrawal
2% (5% for non-filers above ₹1 crore)