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TDS on Purchase of Goods in BUSY: Section 194Q and New Section 393(1)
माल की खरीद पर TDS (194Q / नई धारा 393): BUSY में सेटअप और एंट्री
TDS on purchase of goods: 0.1% above Rs 50 lakh per seller when buyer turnover exceeds Rs 10 crore. Old 194Q, now section 393(1) of the Income-tax Act 2025. BUSY setup and entry.
A buyer whose business turnover exceeded Rs 10 crore in the previous year deducts TDS of 0.1% on purchases of goods from a resident seller, on the amount above Rs 50 lakh per seller in the year. Up to FY 2025-26 this is section 194Q of the Income-tax Act, 1961; from tax year 2026-27 it is section 393(1), Table serial no. 8(ii) of the Income-tax Act, 2025, with the same rate and limits.
The rule in short
| Point | Rule |
|---|---|
| Who deducts | Buyer with business turnover above Rs 10 crore in the preceding year |
| On what | Purchase of goods from a resident seller, amount above Rs 50 lakh per seller in the year |
| Rate | 0.1%; 5% if the seller has not given PAN |
| When | At credit to the seller's account or payment, whichever is earlier (advances too) |
| GST | Not included when GST is shown separately on the bill and TDS is deducted at credit |
| TCS by seller | TCS on sale of goods under section 206C(1H) was removed from 1 April 2025, so only the buyer's TDS applies now |
| Deposit | By the 7th of the next month (March: 30 April); quarterly TDS statement for non-salary payments |
| If not deducted | 30% of the purchase expense can be disallowed, plus interest |
Example: purchases of Rs 1 crore from one seller in a year. TDS = 0.1% of Rs 50 lakh (the excess) = Rs 5,000.
Set it up in BUSY
Enable TDS
Administration > Configuration > Features and Options: enable TDS/TCS with TDS reporting, create the default TDS categories, and set the purchase (194Q) option to Warning Only.
Mark the sellers
Administration > Masters > Account > Modify the supplier. When you save, the TDS window opens: set 194Q as applicable after the limit and pick the payee category.
Check the TDS bill sundry
Administration > Masters > Bill Sundry: in the TDS bill sundry, adjust in purchase amount = N and the account head matches the TDS category.
Pass the entry
Purchase voucher
Transactions > Purchase > Add. Once the seller crosses Rs 50 lakh, BUSY warns that TDS is not deducted when you save.
Apply TDS
Click Yes: the TDS bill sundry is added on the amount above the limit. Fill the TDS reference and save.
Deposit and return
Pay the TDS by the 7th, record the challan, and include it in the quarterly statement.
Steps as given in BUSY's FAQ on busy.in. After 1 April 2026, check that your BUSY version shows the new section reference; the working of the rule is unchanged.
Year-end checks
- List of sellers above Rs 50 lakh vs TDS deducted on each: a party ledger reconciliation helps
- TDS deducted vs deposited vs shown in the quarterly statements
- Payments to micro and small suppliers within 15 / 45 days: free MSME 43B(h) checker
Menu names as given in BUSY's own help on busy.in; they can differ slightly by BUSY version, plan and configuration. Take a backup before changing settings.
Need it done for you?
Our team sets this up remotely over UltraViewer, usually the same day. Call or message us, or see BUSY services.
Updated 2026-10-27 · Bharat Busy Care, Authorised BUSY Platinum Partner, Sri Ganganagar
FAQ
Is 194Q still applicable after the Income-tax Act 2025?
Yes. From tax year 2026-27 the same TDS on purchase of goods is under section 393(1), Table serial no. 8(ii), at 0.1% above Rs 50 lakh. FY 2025-26 and earlier stay under section 194Q.
Is TDS on purchase calculated on the amount including GST?
No, when GST is shown separately on the invoice and TDS is deducted at the time of credit. On an advance payment, TDS is on the full advance.
Does the seller still collect TCS under 206C(1H)?
No. Section 206C(1H) was removed from 1 April 2025; only the buyer deducts TDS.
How do I set up 194Q in BUSY?
Enable TDS in Administration > Configuration > Features and Options, set the 194Q option to Warning Only, mark the supplier as 194Q applicable after the limit in the account master, and apply TDS when BUSY warns on the purchase voucher.
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