Effective from: 1st April 2026

What is it?

Section 393(1) [Table: S.No. 8(ii)] imposes a TDS obligation on the buyer ( Whose Turnover in Previos year exceed 10 Crs )to deduct tax on purchases of goods from resident sellers, once the aggregate purchases from a seller in a tax year exceed the specified threshold.

This is the successor to Section 194Q of the Income Tax Act, 1961 — restructured and consolidated under the new unified TDS framework.

Key Parameters at a Glance

Important Exclusion (Note 1)

The deduction of tax under Serial Number 8(ii) shall not apply to a transaction on which tax is already deductible or collectible under any other provision of the Act.

Example Car Purchase where TCS is already applicable.

In simple terms: if TDS or TCS already applies to a transaction under another clause of Section 393 (or elsewhere), 8(ii) won't kick in again — no double deduction.

How is this different from the old 194Q?

The reform is structural in nature and does not alter the underlying tax incidence. The rates and applicable thresholds remain largely consistent with those prescribed under the Income Tax Act, 1961. The change is essentially a re-numbering and consolidation into a single, cleaner section.

Bottom Line

Section 393(1) [S.No. 8(ii)] is essentially 194Q reborn — same intent, same rates, but now part of a cleaner, consolidated TDS architecture. Buyers making large purchases from resident sellers must stay alert to the ₹50 lakh threshold and deduct 0.1% TDS accordingly, while being mindful of the exclusionary clause to avoid duplicate deduction.