Major change in TDS provisions w.e.f 01st July’2021 – Section 206AB

Finance Act 2021 introduced section 206AB to the Income Tax Act which has major implications on existing TDS provisions and rates. The idea behind this provision is to extract Tax at source from persons who are not filing their IT Returns, thereby making the businesses more responsible towards filing their returns regularly.

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New Section 194Q – TDS on Purchase of Goods

In the Budget for FY 2021-22, a new section 194Q has been introduced which is related to payment of certain sum for purchase of goods.

As per this section, any person, being a buyer who is responsible for paying any sum to any resident for purchase of any goods of the value or aggregate of such value exceeding INR 50 lakhs in any previous year, shall, deduct TDS @0.1% on the total value of the transaction.

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