Section 194Q TDS Declaration (Purchase of Goods)
Inform a supplier that you will deduct TDS at 0.1% on purchases of goods above ₹50 lakh in the year.
Law version: FY 2025-26 (Income-tax Act, 1961); Tax Year 2026-27 onwards (Income-tax Act, 2025). Checked on 26 Sep 2026.
What it is
A buyer whose turnover in the preceding year exceeded ₹10 crore must deduct TDS at 0.1% on the amount by which purchases of goods from a resident seller exceed ₹50 lakh in a year. This was Section 194Q of the Income-tax Act, 1961 for FY 2025-26; from Tax Year 2026-27 it is in Section 393(1) of the Income-tax Act, 2025. Buyers usually write to their suppliers to confirm that they will deduct TDS, share their PAN and TAN, and ask the seller for its PAN.
When it is used
- At the start of the year for large suppliers.
- When purchases from a seller cross ₹50 lakh.
- Replying to a seller who asks about TDS on its invoices.
What the template covers
- Buyer name, PAN, TAN and address
- Buyer turnover in the preceding year
- Seller name, PAN and address
- Year
- Purchases and TDS on the excess over ₹50 lakh
- Authorised signatory
Details you will need
The generator asks for the following. Fields marked with an asterisk in the form are required; the rest can be left blank and filled in later in Word.
Letter
Letter Date
Buyer
Buyer Name; Buyer PAN; Buyer TAN; Buyer Address; Buyer Turnover in Preceding FY (₹)
Seller
Seller Name; Seller PAN; Seller Address
Transaction
Financial Year / Tax Year; Total Purchases from Seller in the year (₹); TDS Deducted @ 0.1% on Excess over ₹50 Lakh (₹)
Signatory
Authorised Signatory (Buyer); Designation
Stamp duty, registration and filing
TCS on sale of goods under Section 206C(1H) was omitted from 1 April 2025, so only the buyer's TDS applies. Without the seller's PAN, TDS is at 5%. TDS is deducted on credit or payment, whichever is earlier, and deposited by the due date. Check the current rules on incometax.gov.in.
Section 206C(1H) (TCS on sale of goods) was omitted from 1 April 2025, so there is no longer any overlap with the seller. Section 206AB (higher TDS for non-filers) was also omitted from that date.
Generate the Section 194Q TDS Declaration (Purchase of Goods)
Fill in the form and download the draft as a Word file. It is a general template, not legal or professional advice; have it reviewed for your facts before you sign or rely on it.
Need this checked against your facts, or the registration or filing that follows (e.g. TDS returns, ITR)? Contact SKAG and Associates
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Frequently asked questions
Who must deduct TDS under Section 194Q?
A buyer whose turnover in the preceding year exceeded ₹10 crore, on purchases from a resident seller above ₹50 lakh in the year.
Does the seller still collect TCS?
No. TCS under Section 206C(1H) was omitted from 1 April 2025.
Is TDS on the GST amount?
Generally on the value excluding GST where GST is shown separately; check the current CBDT guidance.
This page gives general information for reference only. Laws, stamp duty rates and filing requirements change and differ between States, so confirm the current position for your case. Related: all document templates · free tax calculators · compliance calendar and guides.