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
Details of Form 16D
Form 16D contains the following details:
- Name and address of Deductor and Deductee
- PAN/Aadhaar number of the Deductor and Deductee
- Financial Year of Deduction
- Transaction Details
- Details of Tax Deposited
- Challan Identification Number
FAQs
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.
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.
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.
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.
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!
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.
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?
Hi @phoenix
TDS is to be deducted when a payment is due or when an actual payment is made whichever is earlier.
Hope this helps!
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.