Understanding Form 26QD: TDS on Contractual and Professional Payments

What is Form 26QD? It's a form used to report Tax Deducted at Source (TDS) on contractual and professional payments exceeding INR 50,00,000 in a financial year under section 194M. Applicability: Individuals and Hindu Undivided Families (HUFs) must deduct 5% TDS on such payments starting from September 1, 2019.

Example Scenario: If you pay a professional INR 55 lakh on July 20, deduct 5% TDS and deposit it by August 30. Issue Form 16D to the payee by September 15. Steps to Fill Form 26QD: Visit the Income Tax e-Filing portal. Select "e-Pay Tax | Challans" under Quick Links.

Proceed to the NSDL website. Select Form 26QD and fill in details like PAN, payment nature, and amounts. Submit the form. Details Required in Form 26QD: PAN of Deductor/Payer: Your PAN. PAN of Deductee/Payee: PAN of the person receiving the payment. Nature of Payment: Specify if it’s for work under a contract, commission, brokerage, or professional services.

Date of Contract/Agreement: Date of the contract. Amount Paid: Total amount paid. Certificate Number under Section 197: If applicable, for non-deduction or lower deduction of TDS. Date of Credit: When the amount was credited to the payee. Rate of TDS: 5%. Details of Payment of TDS: Information on TDS payment to the government.