TDS under section 194 M

TDS under section 194 M

A new section 194M has been introduced with effect from September 1, 2019, in respect of payment made to any resident in a financial year for an amount exceeding Rs 50, 00,000. This section is applicable whether the payment has been made for personal use or for business use.


Who is it applicable for

The section applies to individuals and HUFs who

(1) are not subject to tax audit and

(2) makes a payment exceeding Rs 50 lacs in a financial year

(3) to a resident

(4) for carrying out any work in the nature of a contract or towards professional services

In other words, this section is not applicable to resident individuals or HUF who are subject to a tax audit in the previous year as in such case they would be covered under section 194 C or 194J

Tax rate

TDS shall be deducted at 5%

Due date of payment of Tax

(1) In case the payment is made in March, TDS shall be paid before 30th of April of the next financial year

(1) In case of any other month – before 7 days from the end of the month in which such payment has been made

Other points

Deductor can pay TDS by quoting PAN and is not required to take TAN

This section is not applicable to non-residents

In case the deductee does not have a PAN, TDS shall be at the rate of 20%

For any queries regarding taxation matters feel free to contact

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