The Central Board of Direct Taxes(CBDT) Wednesday clarified that buyers would need to deduct tax at source at 0.1% of amount exceeding Rs 50 lakh when paid or credited to a resident seller on transactions after July1, 2021, under section 194Q of the income tax Act which comes into effect from July 1.
The Board has clarified that threshold of Rs 50 lakh for triggering TDS shall be computed from April1,2021 and GST component will have to segregated at the time of credit.
It has been stated that sometime in these transactions there is no one-to-one contract between the buyers and the sellers. In order to remover sucha difficulties. It is provided that the provisions of section 194Q of the Act shall not be applicable in relation to:
Transactions in securities and commodities, which are traded through recognised stock exchanges or cleared and settled by the recognised clearing corporation, including recogny stock exchanges or recognised clearing corporation located in international Financial Service Centre.
Transactions in electricity, renewable energy certificates and energy saving certificates traded through power exchanges registered in accordance with Regulation 21 of the CERC
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