The CBDT had announced that Individuals/HUFs making contractual or professional payments need to deducted TDS under section 194M from FY 2019-20 (1st Septemeber, 2019). TDS is deducted @ 5% if the payment exceeds Rs. 50,00,000. And TDS Return for the same needs to be filed in Form 26QD. The payee gets Form 16D as proof of TDS Deduction.
Let us take an example: A person has made a payment to a professional of INR 55 Lakh in the Financial Year. The payment is made on July 20th. Hence, the tax deducted by the person must be deposited with the central government on or before August 30. Therefore, the person must also issue the TDS certificate (Form 16D) by September 15.
Steps to Fill Form 26QD
- Visit the Income Tax e-Filing portal.
Click on the “e-Pay Tax | Challans” option under the Quick Links section.
- Click on the “Continue to NSDL Website” option.
A pop-up message will appear on the screen.
- Click on the “Proceed” option under the Form 26QD section.
It will be above Demand Payment for Rent on Property.
- Fill up the form with the required details like Tenant, Landlord, TDS, Property etc.
Click on the “Submit” option to complete the process.
Details Required in Form 26QD
- PAN of Deductor/Payer
- PAN of Deductee/Payee
- Nature of payment (work in pursuance of a contract/commission/brokerage or fees for professional services)
- Date of contract/agreement
- Amount paid
- Number of the certificate under section 197 issued by the Assessing Officer for non-deduction or lower deduction
- Date of credit
- The rate of TDS
- Details of payment of TDS
Form 26QD has to be filed by the 30th of next month of the deduction of the TDS. For example, the TDS of October has to be deposited by the 30th of November of the same year. TDS of November has to be deposited by 30th of the December and not 31st of December.
Interest @1% is levied if there is a delay in the deduction of TDS. Similarly, 1.5% interest is levied if there is a delay in the deposition of the TDS. Moreover, a late fee of INR 200 per day has to be paid for the late filing of Form 26QD. This penalty cannot be more than the TDS amount.
Form 16D will be given to the payee within 15 days from the date of filing of Form 26QD. It will be provided by the payer/deductor.