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TDS NET WIDEN....UNAUDITED INDIVIDUAL UNDER TDS COMPLIANCES


TDS on payment to resident contractors and professionals    Section194M

A New Section 194M is inserted on 24 December 2019 in The Income Tax Act, 1961 ['The Act'] vide Finance Act, 2019.

->   Levy of TDS at the rate of 5% on the sum paid or credited in a particular year on account of contractual work or professional fees by an individual or a Hindu undivided family (HUF)

-> If aggregate of such sums exceeds INR 50,00,000/- in that year.

-> The said Section does not apply to an Individual or HUF who is required to deduct TDS as per the provisions of Section 194C, 194H or 194J of the Act.

->   Individuals or HUFs can deposit the tax deducted using their PAN and is not required to obtain TAN.

->   Before 01/09/2019, There was no liability on an individual or HUF to deduct TDS on any payment made to a resident contractor or professional when it is for their personal use. NOW, FROM 01/09/2019 ONWARDS, IF INDIVIDUAL OR HUF [ WHO ARE NOT AUDIT ASSESSEE ] ARE REQUIRED TO COMPLY WITH THE TDS PROVISIONS FOR PAYMENT MADE TO CONTRACTOR OR PROFESSIONALS U/S 194M.
Earlier similar kind of provisions were introduced for purchase of immovable property exceeding value Rs. 50 lakhs, 1% TDS required to be deducted U/S 194IA and for payment of Rent exceeds Rs.50000/- p.m., TDS provisions need to be taken care U/S 194IB.

In nutshell, Unaudited Individuals or HUF must comply with the provisions of TDS before making big payments to Contractor and Professionals.

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