Beyond salary TDS, businesses are also required to deduct tax at source on certain purchases and payments to vendors and contractors — a rule that catches many growing businesses off guard once their purchase volume crosses statutory thresholds.
Common TDS categories on the purchase side
- ✓Contractor payments (Section 194C): Deducted when payment to a single contractor exceeds ₹30,000 in a single transaction or ₹1,00,000 in aggregate for the year.
- ✓Professional & technical fees (Section 194J): Applies to payments for professional or technical services above ₹30,000 in a year.
- ✓Purchase of goods (Section 194Q): Applies when a buyer's turnover exceeds ₹10 crore and purchases from a single seller exceed ₹50 lakh in a year.
Missing a TDS deduction doesn't just risk a penalty — the corresponding expense can be disallowed in your own tax return unless the deduction is corrected and deposited.
Staying compliant
Track vendor-wise cumulative payments through the year, not just per-invoice, since many thresholds are aggregate limits. A billing system that flags TDS-eligible transactions automatically at the point of recording a bill removes the risk of missing a deduction at month-end.
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SleetHR runs GST billing, reconciliation, and sales pipeline in one platform.