Question And Answer
Subject: Tds Provision Section 194Q and 194H
Querist: CA Rajesh Gupta
Answered by:
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Date: February 16, 2022
Query asked by CA Rajesh Gupta

My client is a Kaccha Artia in Anaj Mandi (Grain Market) which sells go ods on Dami (Commission) on auction in Anaj Mandi. The Transaction is as follows: –

Sale price = 100/- + Commission = 2/- + Market Board Fee = 1 total = 103/- . The buyer is deducting TDS u/s 194H on Rs.2/- since the insertion of section 194H. Further, Sale of Kaccha Artia is not treated as Sale u/s 44AB as per the clarification of CBDT. Now Section 194Q has been inserted since July 2021. Therefore the buyer has starting deducting TDS under both the section. i.e. u/s 194H on Rs 2 and u/s 194Q on Rs 101/-. whereas section 194Q (5) says that the provision of section 194Q to a transaction on which tds is deductible under any of the provision of the Act,

In view of the aforesaid kindly clarify that which section shall be applicable on the above transaction.



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Section 194Q(5) of the Income-tax Act, 1961 (Act) states that the provision shall not apply to a transaction on which tax is deductible under any of the provisions of this Act.

The application of section 194H of the Act is on the Commission and not the whole transaction. Therefore, it cannot be said that the transaction of sale of goods is already subject to deduction at source under other provisions of the Act.

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