- June 18, 2021
- Posted by: TeamSCK
- Category: Uncategorized
With effect from 01st July 2021 , as per section 194Q of the Income Tax Act , 1961(“Act”) ,a Buyer having turnover of more than INR 10 Crore in the previous financial year, shall be liable to deduct tax at the rate of .1% on purchase of goods exceeding INR 50 lacs from a Seller in that financial year.
Since this section has interconnection with applicability of Tax Collection at source as per section 206(1H) , therefore it is recommended to obtain a declaration from the Buyer regarding the same.
We have attached a draft Declaration to be obtained from the Buyer , for your kind perusal.
Also to note that with effect from 01st July 2021 , as per section 206AB and 206CCA of the Income Tax Act , 1961(“Act”) where tax is required to be deducted or collected as per Chapter XVIIB/Chapter XVII-BB other than sections 192, 192A, 194B, 194BB, 194LBC, or 194N by the deductor to a person, (a) who has not filed the returns of income for both of the two assessment years relevant to the two previous years immediately prior to the previous year in which tax is required to be collected, for which the time limit of filing return of income under sub-section (1) of section 139 has expired, and (b) the aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in each of these two previous years , the tax shall be withheld at higher rate of the following rates :
- at twice the rate specified in the relevant provision of the Act; or
- at twice the rate or rates in force; or
- at the rate of five per cent.
Therefore in this regard , it is advised that a declaration is obtained from the Deductee. We have attached a draft declaration to be obtained from Deductee and the sections , for your kind perusal