TDS or Tax Deducted at Source is the amount of tax that is deducted from the taxpayers by the employer. It is then deposited to the Income Tax Department on behalf of the taxpayer. You should know what is turnover limit for TDS deduction so that you can pay your accurate tax on time. So let me share everything about it here.
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What is the rate of TDS?The rate at which TDS is to be deducted is 0.1% on the amount that exceeds Rs 50 lakh in a financial year from a seller (from whom the buyer has bought property, goods, or more than Rs 50 lakh).
To give you a better idea, let me cite an example-
Suppose A (the buyer) has purchased a property worth Rs 60 lakh from Y (the seller). So the TDS that has to be deducted will be Rs 10 lakh at a 0.1% rate. The TDS amount will be Rs. 1,000.
Note:The Finance Act of 2020 specifies that all individuals and HUFs will be liable to deduct TDS if the revenue exceeds Rs 1 crore in the case of a corporation and Rs 50 lakh in the case of the profession in the previous year.
When is Section 194Q applicable?If you want to know the turnover limit of TDS, you have to learn about Section 194Q as well. This section is applicable from 1st July 2021. The TDS has to be deducted only on purchases that happened after 1st July 2021. The threshold limit of Rs 50 lakh has to be taken into account from 1st April.
This is the turnover limit for TDS deduction I know of.
Read More:How do you deduct TDS on purchase of property from NRI?
What is TDS on sale of property by NRI?
What is Turnover Limit for TDS Deduction?
Pankaj Gupta
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2023-04-28T07:30:18+00:00 2023-05-02T15:06:08+00:00Comment
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