Individuals and the HUFs, who were not required to deduct the tax will be burdened with additional compliances.
The Ministry of Finance recently notified Form 26QD for TDS Return and Form 16D for TDS Certificate under section 194M and 194N of the Income Tax Act. As per section 194M any individual or a HUF, which is not subject to tax audit and is not required to deduct TDS under section 194C, section 194H or section 194J and is making payment to any resident for carrying out any work, commission, brokerage or fees for professional service, shall deduct a sum equal to 5% as TDS and deposit the amount with the Government.
The liability to deduct TDS will arise when the amount paid in one go or during the year exceeds Rs. 50 lakh. The TDS is required to be deposited within 30 days from the end of the month in which the deduction was made and shall be accompanied by a challan-cum-statement in Form 26QD.
An individual is required to issue the TDS certificate to the deductee in Form 16D within 15 days from the due date for furnishing the challan-cum-statement in Form No. 26QD.
The notification has altered the format of TDS return for the TDS to be deducted on the withdrawal of cash exceeding Rs. 1 crore in a financial year from banks, cooperative bank or post office pursuant to section 194N.
TDS so deducted under section 194N is available only to the deductee and the same cannot be carried forward in the subsequent financial years.
Tags tds Income Tax