TDS u/s 194M

[Swaminathan Balasubramanian]

Dear sir

My query is regarding the threshold limit of ₹ 50 lakhs. I have been making payments to the contractor from 1st Apr 2019 and the total paid so far is ₹ 50 lakhs. When I make the next payment, say another ₹ 5 lakhs, what is the TDS to be deducted? Is it for ₹ 5 lakhs or for ₹ 55 lakhs.

Thanks

Balasubramanian

AI Summary

TDS under section 194M applies at the statutory rate to the entire payment once the annual threshold is crossed.
Individuals and Hindu Undivided Families required to deduct under Section 194M must deduct tax at the time of credit or payment of sums for work, commission, brokerage or professional fees. When aggregate payments to a contractor exceed the statutory threshold in a financial year, the deduction obligation applies to the entire amount paid or credited, not solely to the excess, and tax must be withheld at the statutory rate on the total sum.