The Statutory Brief

IT Act 1961 → 2025 / Section 194Q

TDS

Section 194Q → Section 393

TDS by buyers on purchase of goods above ₹50 lakh

Section 194Q of the old Income-tax Act, 1961 · new section 393 under the Income-tax Act, 2025

New reference Section 393(1), Table Sl. No. 8(ii)

Income-tax Act, 1961Section 194Q

  • Buyer with turnover above ₹10 crore in the preceding year deducts 0.1%
  • On purchases from a resident seller exceeding ₹50 lakh in the year (on the excess)
  • Not applicable where TDS or TCS already applies to the transaction

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 393(1), Table Sl. No. 8(ii)

  • Covered by section 393(1), Table Sl. No. 8(ii): 0.1%
  • Tax on the sum exceeding ₹50 lakh (Note 1)
  • 'Buyer' defined in section 402(6): turnover above ₹10 crore
  • Higher rate of 5% if the seller has no PAN (section 397(2))

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Consolidated into section 393 with the same rate, threshold and buyer test.

Practice notes

  • The CBDT mapping table prints this section as '1904Q' — a typo for 194Q.
  • With TCS on sale of goods dropped from 1 April 2025, this TDS is the only withholding on large B2B goods purchases.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the TDS rate on purchase of goods under the new Income Tax Act 2025?

0.1% on purchases from a resident seller above ₹50 lakh in the year, deducted by a buyer whose turnover exceeded ₹10 crore in the preceding year (section 393(1), Table Sl. No. 8(ii)).

What is section 194Q called in the new Income-tax Act, 2025?

Section 194Q of the Income-tax Act, 1961 corresponds to Section 393(1), Table Sl. No. 8(ii) of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 194Q under the new Income Tax Act?

Consolidated into section 393 with the same rate, threshold and buyer test.

Is section 194Q still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 194Q of the 1961 Act. Section 393(1), Table Sl. No. 8(ii) of the 2025 Act applies from tax year 2026-27.

Related sections

206C→394Tax collected at source (TCS) on specified sales, LRS remittances, overseas tour packages, motor vehicles and parking/toll/mine leases194C→393TDS on payments to contractors and sub-contractors194H→393TDS on commission or brokerage (other than insurance commission)