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Section 194J of the Income Tax Act applied to the technical and professional services with a TDS limit set at INR 30,000. If you failed to do so, then you are liable to pay penalties and high interest charges. This section covers the payments of technical services, royalties, and professional fees. On the other hand, Section 194M is introduced to ensure tax compliance for HUFs and individuals. This section applies to Individuals and HUFs who make payments of more than INR 50 lakhs in a financial year to the resident contractors, service providers, and professionals for personal use.
Here are some of the differences between Section 194J and Section 194M:
Section 194J is related to the TDS on the technical and professional services, and this section covers the HUFs and individuals who need to get their accounts audited under section 44AB. Under section 194M, it applies to individuals and HUFs who do not need to audit their accounts under section 44AB. Under this section, TDS rates are 5% for the payments to professionals or contractors for personal use of amounts more than 50 lakhs in a financial year.
The due date of the TDS under section 194M is at the time the amount is credited, or at the time of the payment by cheque and draft.
Under section 194J, given low entities must deduct TDS:
Under section 194M, an individual or HUF has to deduct TDS if the payments are more than INR 50 lakhs in a financial year.
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Given below is the list of payments that are protected under Section 194J:
Here are some of the other specific cases, where payments are protected in section 194J: