TDS Certificate : Form 16D Details

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Maharshi Shah

Form 16D
Form 26QD
Section 194M
TDS Certificate
Last updated on January 25th, 2023

Form 16D is a TDS Certificate issued by a Payer for payment of a commission, brokerage, contractual fee, and professional fee under section 194M. Basically, It contains details of the nature of the payment and the TDS deducted from it. Section 194M has been applicable from the 1st of September 2019. Thus, Form 16D can be downloaded from FY 2019-20 onwards. The taxpayer can download Form 16 from the TRACES portal.

As per the section, if the payments to resident contractors and professionals exceeding INR 50,00,000 Lakhs during the Financial Year, the payer/deductor has to deduct tax at the rate of 5% from the sum payable to a resident payee/deductee.

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As per the Central Board of Direct Taxes (CBDT) notification, the due date of payment of TDS on payments to resident contractors and professionals is within a period of thirty days from the end of the month in which the payment has been made. Hence, Form 16D has to be issued 15 days from the date of issuance of Form 26QD.

For example, A professional payment of INR 65 Lakhs has been made in the Financial Year 2019-2020. The payment is made on the 15th of August. Hence, the tax deducted must be deposited with the government, and Form 26QD should be filed on or before the 30th of September. Furthermore, the deductor should also issue the Form 16D TDS certificate by October 15.

Sample Form 16D

Form 16D

Details of Form 16D

Form 16D contains the following details:

FAQs

Who is responsible to deduct the TDS on payments to resident contractors and professionals under section 194M?

The Payer/Deductor being an Individual or a HUF (not liable to tax audit u/s 44AB) would have to deduct the TDS at the rate of 5% and deposit the same with the government by filing Form 26QD.

What is Form 26QD?

Form 26QD is the challan-cum-statement for reporting the transactions liable to TDS on payments to resident contractors and professionals under section 194M of the Income-tax Act, 1961.

Is Form 16D different from Form 16A?

Form 16D is the TDS Certificate issued by a payer for payment of a commission, brokerage, etc. u/s 194M
Form 16A is the TDS Certificate issued by a deductor for non-salary payments like professional fees, brokerage, commission, interest, rent, contractual payment, etc.

What is the fee in Form 26QD and when is it applicable?

As per section 234E of the Income-tax Act, 1961 if the payer doesn’t furnish challan-cum-statement in Form 26QD electronically within 30 days from the end of the month in which the tax deduction is made, It will attract a fee for default in furnishing the statement at the rate of INR 200 for every day till the date return is filled.

Got Questions? Ask Away!

  1. Hey @Joe_Fernandes ,

    Thank you for reaching out to us!

    You need to keep in mind following dates for TDS Return filing:

    Penalty Under Section 234E is levied in case you miss out on filling TDS return on time. The penalty of INR 200 per day is levied on the taxpayer till the day on which return is filed. Provided that the amount of Penalty should not exceed the number of TDS payable.

    Hope this helps!

  2. Hi @Neel

    If you have already filed an online correction return by adding the correct challan details, you should wait for the department to process the same. If your correction gets processed successfully then your demand will get nullified otherwise you can go ahead and file the offline correction.

    Hope this helps.

  3. When should TDS be deducted, at the date invoice was issued, at the time of payment, or at the due date of making payment for the invoice?

  4. Hi @np16

    If your rental income for a year exceeds INR 2,40,000 (INR 1,80,000 till FY 2018-19), TDS is deducted by the tenant. However, if your total income including rent is not taxable then you can submit Form 15G / 15H to the tenant to save yourself from TDS deduction.

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