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Section 194M - TDS on payment to resident for certain services

Section 194M deals with TDS on payment to residents for certain specified transactions by individual or Hindu Undivided Family (HUF). In case Individual or HUF is liable to Tax Audit then they are required to deduct TDS under section 194C, 194J and 194H as applicable.

Let us get a brief idea about applicability of section 194M.



TDS under Section 194M of Income Tax
EFFECTIVE DATE

Section 194M is effective from 01st September 2019. TDS amount will be deducted on payment made after 01st September 2019 even if the contract is in existence before 01 Sept 2019 if payment amount exceeds Rs.50,00,000/- in a financial year. We will see in details about applicability in later part of this topic.



SECTION 194M IS APPLICABLE TO WHOM?

Section 194M is applicable to:

  • Individual

  • HUF

who are Indian Resident and not liable for tax audit.


WHEN IS TDS REQUIRED TO BE DEDUCTED UNDER SECTION 194M?

TDS under section 194M is required to be deducted when:

  • Payment is made to Resident.

  • Payment is made for Contractual Working (including supply of labour) or Professional Services or by way of commission (not on insurance Commission).

  • Amount paid is more than Rs.50,00,000/- to a single recepient in a financial year.

  • Payer is not liable for Tax Audit.

WHAT IF INDIVIDUAL OR HUF (PAYER) IS LIABLE FOR TAX AUDIT?

In case Individual or HUF who is required