The Central Board of Direct Taxes (CBDT) has notified the Form No 26QD for the payment of Tax Deduction at Source (TDS) under Section 194M of the Income Tax Act, 1961.
The government vide Finance Act (No 2) 2019, recently introduced section 194M in the Income Tax Act, 1961 making it mandatory for an individual or HUF to withhold taxes at 5% on such payments to a contractor or a professional or commission or brokerage more than Rs 50 lakh in a financial year.
However, this section applies only to those individuals and HUFs whose accounts are not required to be audited for tax purposes.
Earlier, only individuals and HUFs who were mandatorily required to have their accounts audited as per the tax laws were required to deduct tax at source (TDS) on contractual, professional and commission or brokerage payments under sections 194C, 194J and 194H of the Act, respectively.
The Notification said that, “any sum deducted under section 194M shall be paid to the credit of the Central Government within a period of thirty days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum statement in Form No. 26QD”.
The Notification also said that, “Where tax deducted is to be deposited accompanied by a challan-cum-statement in Form No.26QD, the amount of tax so deducted shall be deposited to the credit of the Central Government by remitting it electronically within the time specified in sub-rule (2C) into the Reserve Bank of India or the State Bank of India or any authorised bank”.
“Every person responsible for deduction of tax under section 194M shall furnish the certificate of deduction of tax at source in Form No.16D to the payee within fifteen days from the due date for furnishing the challan-cum-statement in Form No.26QD under rule 31A after generating and downloading the same from the web portal specified by the Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems) or the person authorised by him.”
“Every person responsible for deduction of tax under section 194M shall furnish to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (System) or the person authorised by the Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems) a challan-cum statement in Form No.26QD electronically in accordance with the procedures, formats and standards specified under sub-rule (5) within thirty days from the end of the month in which the deduction is made”, the Notification also added.
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