TaxTMI 
TaxTMI 
INCOME TAX TDS ON GOODS SECTION: 393(1) SI.NO. 8(ii)
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....NCOME TAX TDS ON GOODS SECTION: 393(1) SI.NO. 8(ii)<br> Query (Issue) Started By: - Hithik Dated:- 28-7-2026 Last Reply Date:- 28-7-2026 Income Tax<br>Got 1 Reply<br>Income Tax<br>AS PER NEW SECTION FOR TDS ON PURCHASE OF GOODS, IS THE DEFINATION OF BUYER HAS BEEN DEFINED YET OR ANY CLARIFICATION BY CBDT IN THIS REGARD.?, AS A NEW COMPANY INCORPORATED IN CURRENT FINANCIAL YEAR HAVING PURCHASES OF ....
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....FIXED ASSETS >50LACS WOULD TDS BE APPLICABLE CONSIDERING WIDE SCOPE OF "BUYER"? Reply By Sanjeev Agarwal: The Reply: TDS on Purchase of Goods - Applicability to a Newly Incorporated Company The new TDS provision on purchase of goods (corresponding to erstwhile Section 194Q) does not define "buyer" independently. Instead, a person becomes liable to deduct TDS only if the prescribed turnover....
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..../gross receipts threshold in the immediately preceding financial year is satisfied. A newly incorporated company, having no turnover in the immediately preceding financial year, cannot satisfy this statutory condition. Therefore, despite purchases (including fixed assets) exceeding Rs. 50 lakh during its first financial year, it does not qualify as an eligible buyer for this provision. Furth....
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....er, CBDT has not issued any clarification expanding the definition of "buyer" to include newly incorporated companies merely because their purchases exceed Rs. 50 lakh. Under the earlier Section 194Q regime, CBDT also clarified that the turnover test must be applied with reference to the immediately preceding financial year, effectively excluding first-year companies. Although capital goods/fix....
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....ed assets are generally covered within the expression "goods", this becomes relevant only if the purchaser first qualifies as an eligible buyer. Conclusion: A company incorporated during the current financial year is not liable to deduct TDS on purchases of goods, including fixed assets exceeding Rs. 50 lakh, in its first financial year, since it does not meet the prerequisite turnover condi....
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....tion of the immediately preceding financial year. This is the legally sustainable and litigation-defensible position in the absence of any contrary statutory amendment or CBDT clarification.<br> Discussion Forum - Knowledge Sharing ....