TDS · Section 194Q · FY 2026–27
Section 194Q: TDS on Purchase of Goods
Section 194Q (TDS on Purchase of Goods): the TDS rate is 0.1%. Threshold: Rs. 50,00,000 per financial year per seller. From 1 April 2026 the Income-tax Act, 2025 moves it to Section 393(1) Sl. 8(ii), with the same rate and threshold.
Section 194Q requires buyers (whose turnover exceeded Rs. 10 crore in the prior year) to deduct 0.1% TDS on goods purchases above Rs. 50 lakh per seller per year. Mostly relevant to manufacturers/traders; freelancers buying equipment or selling goods may encounter this.
Rate source: Income Tax Department TDS rate chart
0.1%
0.1%
Threshold
₹50L a year
Who deducts
Buyers with prior-year turnover above Rs. 10 crore.
No PAN
5%
Shows up in
Form 26AS & AIS, quarterly
What it looks like on a real payment
Worked exampleSec 194Q
Amount payable to you₹60,00,000
TDS @ 0.1%− ₹1,000
You receive₹59,99,000
The ₹1,000 is not lost — it is pre-paid tax, credited in your 26AS and adjusted at filing.
0.1% of Rs. 10L (the excess over Rs. 50L in a Rs. 60L year) = Rs. 1,000.
Run your own numbersFree 194Q calculator — invoice amount in, deduction and take-home out. No signup.What this means for you
Because the rate is only 0.1% the withheld amount is small and is adjusted against your total tax at ITR — typically refunded once your advance tax already covers your liability.
194Q is a buyer-side deduction (buyers with prior-year turnover above Rs. 10 crore) on goods purchases above Rs. 50 lakh per seller. A freelancer who sells physical products — merch, prints, hardware — to a large buyer may see 0.1% withheld on the amount above Rs. 50L. It does not apply to services: pure freelance service income is 194J or 194C territory, not 194Q.
From 1 April 2026, the Income-tax Act 2025 renumbers this as Section 393(1) Sl. 8(ii). The rate and threshold are unchanged — only the citation moves.
When your client must deposit it — and report it
The client must deposit TDS by the 7th of the month after deduction (30 April for March). It reaches your 26AS only after they file the quarterly TDS statement (Form 26Q), due on these dates — which is why a deduction in March can be invisible until 31 May:
Form 26Q · quarterlyFY 2026–27
Q1 — Apr to Jun31 July
Q2 — Jul to Sep31 October
Q3 — Oct to Dec31 January
Q4 — Jan to Mar31 May
FAQ
What is the TDS rate under Section 194Q?
Who deducts TDS under Section 194Q?
What is the threshold for Section 194Q TDS?
Is TDS under Section 194Q deducted on the GST-inclusive amount?
How do I claim TDS deducted under Section 194Q in my ITR?
Not sure how to claim this TDS back? Read the freelancer’s guide to TDS deducted by clients — how it lands in your 26AS and how you reclaim it in your ITR.
For the CA reading this
The deadline sheet you already send, with your name on it
Every statutory date for the month — GST returns, advance tax, and the dates your client's own customers owe them: when the TDS they withheld must reach the department, and when the certificate is due. Add your firm's name and forward it as it stands. No signup, no email, nothing to accept.
The image is the one that travels on WhatsApp. Dates are statutory, not advice — the sheet says which rows bind whom.
Sources
Rates as notified for FY 2026–27 and can change. General information, not tax advice. Verify with your CA before you file.
Related sections
Every deduction, tracked to the rupee
Your TDS credits, never lost.
HourSlip logs the expected deduction on every invoice and reconciles it against 26AS — so filing season has no surprises.
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