New Delhi: The Central Board of Direct Taxes (CBDT) has brought into effect a provision relating to tax deducted at source (TDS) applicable to businesses with turnover of over Rs 10 crore.
In a major move towards ease of doing business, new guidelines direct that businesses buying shares or commodities traded through recognised exchanges will not be required to deduct TDS on the transaction.
The Central Board of Direct Taxes (CBDT) has brought into effect a provision relating to tax deducted at source (TDS) applicable to businesses with turnover of over Rs 10 crore.
The Finance Act, 2021 inserted a new section 194Q in the Income-tax Act 1961 which takes effect from July 1, 2021. It applies to any buyer who is responsible for paying any sum to any resident seller for purchase of any goods of the value or aggregate of value exceeding Rs 50 lakh rupees in any previous year.
The buyer, at the time of credit of such sum to the account of the seller or at the time of payment, whichever is earlier, is required to deduct an amount equal to 0.1 per cent of such sum exceeding Rs 50 lakh as income tax. Buyer is defined to be a person whose turnover from the business exceeded Rs 10 crore during the financial year immediately preceding the financial year in which the purchase of goods is carried out.
