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New and amended TDS provisions proposed in Union Budget 2019

new and amended tds provisions in union budget 2019
  1. Insertion of Section 194M – TDS on payment by individual / HUF for contractual / professional services
  • A new section 194M has been inserted effective from 1st September 2019
  • As per the section, the individuals or HUF are liable to deduct TDS @ 5%
  • On the sum or aggregate of sums, paid or credited in a year
  • On account of contractual work or professional fee
  • If the sum exceeds Rs. 50 Lakhs
  • For deducting TDS, there is no need to obtain TAN.
  • TDS shall be deposited by using the PAN of the deductor.


     2. Amendment in Section 194IA – TDS at the time of purchase of immovable property

  •  Presently, TDS @ 1% is deducted on the amount of consideration paid or credited for transfer of such property.
  • At present, the term “consideration for immovable property” has not been defined in the Act. And while making the payment for the purchase of immovable property, a number of other payments have to be made for other amenities like club membership fee, car parking charges, etc.
  • In order to cover these payment within the ambit of TDS, the Govt. has proposed to amend the definition of “consideration for the purchase of immovable property” and include all these payments within the ambit of the TDS.
  • This amendment will be applicable from 1st September 2019 onwards.


3.Insertion of Section 194N – TDS on cash withdrawal

  •  With effect from 1st September 2019, TDS @ 2% shall be levied on the person on account from cash withdrawals of amount in excess of Rs. 1 Crore during the year from a banking company or co-operative bank or post office .
  • However, the following persons shall be outside the ambit of the said provisions:-
    • Government
    • Banking company
    • Co-operative society engaged in carrying on the business of banking, post office, banking correspondent and white label ATM operator that are handling high amount of cash as a part of their business operation


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