TDS on Purchase of Goods Vs. TCS on Sale of Goods

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TDS on Purchase u/s 194Q and TCS on Sale of Goods u/s 206C(1H) are most important sections under Income Tax Act applicable w.e.f 2021

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TDS on Purchase u/s 194Q:

TCS on Sale of Goods u/s 206C (1H):


Comparison of TDS on Purchase of Goods (Section 194Q) and TDS on Sale of Goods (Section 206C) in a table format:

AspectTDS on Purchase of Goods (Section 194Q)TDS on Sale of Goods (Section 206C)
ApplicabilityBuyer’s turnover > Rs. 10 croresSeller’s turnover > Rs. 10 crores
ScopePurchase of goods onlySale of goods, including specified transactions (e.g., scrap, minerals)
TDS DeductorBuyerSeller
TDS CollectionAt the time of credit/paymentAt the time of sale
TDS Rate0.1% of purchase consideration exceeding Rs. 50 lakhs0.1% of Sale consideration exceeding Rs. 50 lakhs
ExclusionsSpecific exclusions apply (e.g., transactions already covered under other TDS provisions)Specific exclusions apply (e.g., transactions where the buyer provides Form 27C, transactions covered under other TDS provisions)
ObjectiveBuyer deducts TDS on significant purchases of goodsSeller collects TDS on sale of certain goods
Compliance BurdenOn the buyerOn the seller
PurposeWidening tax net, enhancing tax complianceCollecting tax at the source from buyers on certain goods

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Pooja Gupta

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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