Applicability and Rate of TDS
This section is applicable on those individuals and HUFs who are not required to deduct income-tax as per the provisions of section 194C or 194H or 194J.
Section 194M, inserted with effect from 1.9.2019, provides for deduction of tax at source @5% by an individual or a HUF responsible for paying any sum during the financial year to any resident
- for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract; or
- by way of commission (not being insurance commission referred to in section 194D) or brokerage; or
- by way of fees for professional services.
Time of deduction
The tax should be deducted at the time of credit of such sum or at the time of payment of such sum, whichever is earlier.
Threshold limit
No tax is required to be deducted where such sum or, as the case may be, the aggregate amount of such sums credited or paid to a resident during the financial year does not exceed Rs. 50,00,000.
Non-applicability of TDS under section 194M
An individual or a Hindu undivided family is not liable to deduct tax at source under section 194M if
- they are required to deduct tax at source under section 194C for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract , or
- they are required to deduct tax at source under section 194H on commission (not being insurance commission referred to in section 194D) or brokerage, or
- they are required to deduct tax at source under section 194J on fees for professional services
No requirement to obtain TAN
The provisions of section 203A containing the requirement of obtaining Tax deduction account number (TAN) shall not apply to the person required to deduct tax in accordance with the provisions of section 194M.