# TDS by Individual/HUF (Not Liable to Audit) - Section 194M

## Purpose

To capture TDS on personal-purpose payments made by individuals/HUFs (who are otherwise not required to deduct under 194C, 194H, 194J because they are not in business or are below turnover limits).

## Trigger

Individual / HUF makes payment to a resident for:

Carrying out any work (incl. supply of labour) — would have been 194C
Commission / brokerage — would have been 194H
Professional / technical services — would have been 194J

AND the payment is for personal purpose (or for business not subject to tax audit u/s 44AB).

## Threshold

Aggregate of such payments during the financial year exceeds ₹50,00,000.

## Rate

2% of the sum paid.

## Relationship with 194J / 194C / 194H

If the individual is required to deduct under 194C/194H/194J (because liable to tax audit), section 194M does NOT apply.
If 194J's normal trigger does not apply (e.g., professional fees paid for personal purpose), 194M may step in if aggregate > ₹50L.

## TAN Not Required

Deposit using PAN via Form 26QD.

Worked example

### Example 1

Example: Mr. P (not subject to tax audit) pays Dr. Srivatsan ₹40,00,000 for personal medical consultation during the year.

Solution:

194J does NOT apply (payment is for personal purpose, not business/profession of Mr. P).
194M would apply only if aggregate > ₹50 lakhs.
Payment of ₹40 lakhs ≤ ₹50 lakhs threshold.
⇒ No TDS required.

⚠️ Common exam mistakes

Applying section 194J to professional fees paid by an individual for personal purposes — 194J needs the payer to be doing business/profession.
Treating the 194M threshold as ₹50,000 (which is 194J's threshold) — 194M threshold is ₹50 LAKHS.
Forgetting that 194M overrides only when 194C/194H/194J do not apply.

Bare-Act text 194M · Income-tax Act, 1961 · click to expand

Section 194M would have been attracted if the payment or aggregate of payments exceeded ₹50 lakhs in the P.Y.2025-26. However, since the payment does not exceed ₹50 lakh in this case, there is no liability to deduct tax at source under section 194M also.

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Section 194M - TDS on Payments by Individual/HUF for Personal Use

Worked example

⚠️ Common exam mistakes