In a series of clarification regarding TDS obligation from 1^st July 2021 Onwards, the Central Board of Direct Taxes, Government of India, has issued another circular on 30^th June 2021 answering the following questions in connection with TDS liability under section 194Q of the Income-tax Act, 1961. The provision is applicable from 1^st July 2021 onwards and makes it mandatory to deduct / withhold tax at source on Purchase of goods from an Indian resident seller, subject to certain conditions. Please refer our email dated 9^th June 2021 for details.

1.          Exemption to certain categories of transactions

Section 194Q shall not apply to:

·         Transactions in securities and commodities which are traded through recognized stock exchanges or cleared and settled by recognized clearing corporation (including those located in International Financial Service Centre)

·         Transactions in electricity, renewable energy certificates and energy saving certificates traded through registered power exchanges

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