In respect of the following independent case scenarios, you are required to discuss the provisions related to tax deducted at source/tax collection…

By virtue of section 206C(1A), Mr. Sandeep is not required to collect tax at source under section 206C (1) , since Mr. Raju has furnished a certificate to Mr. Sandeep that the scrap purchased from him is for manufacturing process carried on by him and not for trading purposes. However, TDS under section 194Q will be attracted in the hands of the buyer in such cases covered under section 206C(1A), if the conditions specified under section 194Q are fulfilled. In this case, tax is required to be deducted at source under section 194Q by the buyer, Mr. Raju, since his turnover in the immediately preceding financial year i.e., F.Y.2023-24 exceeds 10crores and he has purchased goods of the value or aggregate of such value exceeding 50lakhs in the F.Y.2024-25. TDS u/s 194Q would be 0.1% of the sum exceeding 50lakhs and the same has to be deducted at the time of payment or credit of such sum to the account of resident seller, whichever is earlier. Therefore, in the present case, Mr. Raju is required to deduct tax at source @ 0.1% of 5,00,000, being the amount exceeding 50lakhs at the time of credit.