TaxTMI 
TaxTMI 
194M & Form 26QD - Rate of Tds & payment date to be entered in 26qd
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....94M & Form 26QD - Rate of Tds & payment date to be entered in 26qd<br> Query (Issue) Started By: - Nivetha K Dated:- 29-1-2025 Last Reply Date:- 22-4-2025 Income Tax<br>Got 1 Reply<br>Income Tax<br>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....
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.... 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 80Lx2% ....
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....= 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. Reply By YAGAY andSUN: The Reply: Great questions! You're on the right track....
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.... regarding Section 194M, and I'll break down both your queries with the applicable reasoning based on current rules: ✅ Quick Background on Section 194M: * Applicable to Individuals or HUFs (non-audit cases) making payments to resident contractors, professionals, or for commission / brokerage, exceeding Rs.50 lakhs in a financial year. * TDS is deductible on the entire amount (not just t....
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....he excess over Rs.50L) once the threshold is crossed. * From 1st October 2024, the TDS rate is reduced from 5% to 2% (as per the Union Budget 2024 amendment). 💡 Your Scenario: Particulars Amount Date 1st Payment Rs.10L Sep 2024 2nd Payment Rs.70L 30 Dec 2024 Total till now Rs.80L Threshold exceeded 3rd Payment Rs.20L March 2025 📌 Q1: TDS Rate - Is 2% Applicable o....
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....n Entire Rs.80L in December? ✅ Yes, correct. Since the liability to deduct TDS arises only when the total payment crosses Rs.50L, and in your case, it happens on 30th Dec 2024, the applicable TDS rate is the one in force on that date. * Hence, TDS = Rs.80L x 2% = Rs.1.6L * You do not need to apply 5% on the Rs.10L paid earlier, as TDS was not required at that time (threshold not crosse....
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....d yet). 📌 Q2: How to show two payment dates in Form 26QD when only one payment date field is allowed? This is a common issue with Form 26QD. * The form only accepts one "Date of Payment/Credit", so you need to enter the date when the threshold was crossed and TDS becomes applicable - in your case, 30th Dec 2024. ➡️ Steps to file Form 26QD in this case: * Total payment:....
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.... Rs.80,00,000 * TDS deducted: Rs.1,60,000 * Date of payment/credit: 30-Dec-2024 * Date of TDS deduction: 30-Dec-2024 * Payment type: Contractual (as applicable) 📝 Note: While the first Rs.10L was paid in September, it did not attract TDS as the threshold wasn't breached then. Once the threshold is crossed in December, TDS applies retrospectively on the entire Rs.80L paid during th....
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....e year, and you report it as a single consolidated transaction as per Form 26QD limitations. 📌 For 3rd Payment of Rs.20L in March 2025: You will have to file another Form 26QD for that payment: * Amount paid: Rs.20L * TDS: Rs.40,000 (2%) * Date of payment/credit: March 2025 * Date of deduction: Same as above ✅ Summary: Payment Date Amount Paid TDS Deduction Date TDS Ra....
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....te TDS Amount Form Sep 2024 Rs.10L Dec 30, 2024 2% Rs.1.6L on Rs.80L 26QD (Dec) Dec 2024 Rs.70L Dec 30, 2024 2% Part of Rs.1.6L 26QD (same) Mar 2025 Rs.20L Mar 2025 2% Rs.40K 26QD (Mar)<br> Discussion Forum - Knowledge Sharing ....