As the Announcement under UNION BUDGET 2019 had proposed a new section 194 M of the Income Tax Act,1961, which requires an Individual or an HUF, to deduct TDS @5%, where they make payment which exceeds Rs. 50 lakh in a year to a contractor or to a professional.
Any Person Other than Those who are required to deduct income as per the provisions of Section 194 C or 194J i.e., a person being an individual or a HUF are liable to pay any sum to the resident for the carrying out the work of labour supply in the contractual work or a professional services during the financial year, The payment will liable to pay as earliest of the following:
So the Deduction is an amount equal to 5% of the amount.
The deduction will not be allowed if the amount does not exceed to Rs. 50 Lakh.
Whether or not an individual or a Hindu undivided Family carried out or not any business or profession then also the provisions of Section 194M of the Income Tax Act, 1961 will apply.
This section is not apply to an individual or a HUF who are required to deduct TDS under section 194C or 194J.
Person required to deduct TDS under this section the provision of section 203A shall not apply.