Section 194M → Section 224
TDS on payments to resident contractors and professionals by certain individuals or HUF
Quick Answer
Section 194M of the Income Tax Act, 1961 (TDS on payments to resident contractors and professionals by certain individuals or HUF) corresponds to Section 224 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 194M
The starting point is Section 194M of the Income Tax Act, 1961 — TDS on payments to resident contractors and professionals by certain individuals or HUF. TDS @ 5% on payments exceeding Rs. 50 Lakhs a year for personal work (weddings, home renovation).
From 1st April 2026, the same subject sits at Section 224 of the Income-tax Act, 2025 — retained and renumbered as Section 224 of the Income-tax Act, 2025. Retained. Rate reduced to 2% to align with Section 194C/J changes.
For Section 194M, the practical impact is rated Medium. Important for HNWIs planning large personal events or constructions.
Sec 194M
Provision Summary
TDS @ 5% on payments exceeding Rs. 50 Lakhs a year for personal work (weddings, home renovation).
Sec 224
Provision Summary
Retained. Rate reduced to 2% to align with Section 194C/J changes.
Key Changes & Highlights
- Compliance made easier: No TAN (Tax Deduction Account Number) required; payment can be made using PAN.
Frequently Asked Questions
What is Section 194M of the Income Tax Act, 1961 about?
Section 194M of the Income Tax Act, 1961 covers TDS on payments to resident contractors and professionals by certain individuals or HUF. TDS @ 5% on payments exceeding Rs. 50 Lakhs a year for personal work (weddings, home renovation).
Which section replaces Section 194M in the Income-tax Act, 2025?
Section 194M of the Income Tax Act, 1961 maps to Section 224 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Rate reduced to 2% to align with Section 194C/J changes.
What is the impact of the change to Section 194M under the new tax code?
The transition impact for Section 194M is rated Medium. Important for HNWIs planning large personal events or constructions.
What should I watch out for when Section 194M moves to the 2025 code?
Compliance made easier: No TAN (Tax Deduction Account Number) required; payment can be made using PAN. These points are specific to Section 194M (TDS on payments to resident contractors and professionals by certain individuals or HUF).
Disclaimer: This mapping of Section 194M (TDS on payments to resident contractors and professionals by certain individuals or HUF) to Section 224 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 194M is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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