Section 194Q – Purchase of Goods
When configuring the TDS tax rule for Section 194Q, the threshold should be set at ₹50 lakh on a yearly basis, and the “Retrospective” option must be set to “NO” for vendors with PAN. This is because, under government regulations, the vendor is not liable to deduct TDS on the initial ₹50 lakh.
In contrast, for some selective section codes, the vendor remains liable to deduct TDS on the cumulative amount once the threshold is reached, including the portion that contributed to crossing the limit.