194M & Form 26QD - Rate of Tds & payment date to be entered in 26qd

[N K]

In 194M case, the total contract value is 100Lakhs. Contract date is Aug 2024.

1st Payment of 10 Lakhs was made in September 2024 but no tds was deducted as the total payment amount didn't exceed 50 lakhs.

2nd payment of 70 lakhs is paid on 30th dec 2024. So total payment (10L+70L) exceeds 50 lakhs. So Tds to be deducted on entire 80Lakhs now.

3rd payment of 20 lakhs will be paid in march 2025.

My doubts are

1) I saw that from Oct 2024, 194M tds rate is reduced from 5% to 2%. In the above case, TDS is attracted only in Dec 2024. So TDS rate is 2% (not 5%) and the tds amount is 80L×2% = 1.6Lakhs. Is it correct?

2) While filling form 26QD (after making 2nd payment of 70L), there is option of entering only one payment date. But in this case, payment is made on 2 different dates (10L in September, 70L in December). How do I show it in the form 26QD of income tax portal?

Please guide me. Thank you.

AI Summary

Threshold-based TDS obligation applies when aggregate payments exceed the threshold; applicable rate at crossing date governs deduction.
When aggregate payments to a resident contractor in a year cross the statutory threshold, the payer must deduct tax on the entire amount paid to date at the withholding rate in force on the date the threshold is crossed. For filing, the payer should enter the threshold-crossing date as the single Date of Payment/Credit and Date of Deduction in Form 26QD and consolidate prior payments into that entry; payments after that date must be reported and withheld separately in subsequent filings.