Let’s Start with TDS Rates Set up. We have Create new 194Q Section Code, with set up for NRI Assessee Code and Country code is IN and TDS Threshold amount is set at Rs. 50,00,000, with Calc. over and Above Threshold as Yes.

On Vendor Card, select the Country/Region as IN, Currency code as USD, Assessee code as COM and Enter the PAN no. for such Vendor.

On the Vendor Card Page, Go to

Vendor > Choose the Allowed Sections action, select the Section code as 194Q-1 and select the Boolean for Non Resident Payment as True.

Case 1: Purchase order with Multiple Lines, Total Order value > Rs. 50,00,000.

Now Let’s Create the Purchase Order

We have created the Purchase order with Multiple line and mentions the TDS section is 194Q.

Tax Information

On Purchase Order Page, you can see the total amount for the said purchase order is greater than the Threshold mentioned on the Tax rate set up.

Even though the total amount of the invoice is USD 80,00,000, still there is no TDS calculated for the said Order.

The threshold set for 194 Q-1 is Rs. 50,00,000.

Open the Statistics Page, we can see the TDS amount is not calculated on multiple lines.

Expected Result: Tds should have been calculated on Purchases(LCY) amount : Rs. (680,000,000 – 50,00,000) * 0.10% = Rs. 6,75,000

Result : Fail.

Case 2: Single Line Purchase Order, which crosses the Threshold Limit of Rs. 50,00,000, still no TDS is calculated.

We have created a Purchase Order for Single line where the LCY amount exceeds the threshold limit of 50,00,000.

Expected Result: Tds should have been calculated on Purchases(LCY) amount : Rs. 255,000,000 * 0.10% = Rs. 255,000

Result: Fail