W.e.f. 01-07-2021, if you are deducting TDS or collecting TCS from any person, you need to check the following steps for determining the correct rate of deduction.
1. Check whether the said party has filed income tax return for the last 2 assessment years.
If yes, deduct the TDS at normal rates.
If No, check the second point.
2. Check whether the total TDS + TCS of said party in these years is more than Rs. 50000/-
If No, deduct the TDS at normal rates.
If Yes, then TDS will be deducted at the higher of the following rates.
a. Double the applicable rate of TDS
whichever is more
For complying with this provision, you need to take the declaration in the below format from the party.
Download Declaration Format
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Declaration under 206AB and 206CCA of Income Tax Act
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Understanding New Section 194Q : TDS on Purchase of Goods w.e.f. 01-07-2021W.e.f. 01-07-2021, Section 194Q, an important provision of the Income Tax Act, 1961 is getting applicable. Under this section, TDS is requi...