The 60-second version
Section 194M requires individual/HUF (not subject to audit) to deduct 2% TDS on contract or professional payments above ₹50 lakh per year — no TAN, challan 281 with PAN.
194M is no-TAN lane for big home renovation and consultant payments
Section 194M applies when individual or HUF not liable to tax audit pays more than ₹50 lakh per year for contract work or professional services.
Deduct 2% at time of credit or payment — deposit via challan 281 using deductor PAN without TAN.
Business lane: Section 194C guide if you operate through company.
Individual payer TDS matrix
| Section | Rate | Threshold |
|---|---|---|
| 194M | 2% | Contract/professional > ₹50L/yr |
| 194IB | 5% | Rent > ₹50k/month |
| 194IA | 1% | Property > ₹50L |
| 194C | 1–2% | Business entity contractor |
194M sequence
Track cumulative
Per payee per FY.
Cross ₹50L
Start 2% deduction.
Payee PAN
Mandatory.
Challan 281
Deductor PAN, no TAN.
Form 16C-like cert
Give payee deduction proof.
Flow
194M kit
- Payee PAN.
- Invoice ledger.
- Challan receipts.
- FY cumulative tracker.
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Tax audit case
If you are subject to tax audit, 194C/194J apply instead — not 194M.
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0 of 4 checked
Interior designer ₹60L?
194M 2% on payments after crossing ₹50L cumulative.
Company pays?
194C or 194J — not 194M.
No PAN?
20% per Section 206AA.
Quarterly 26Q?
Individual without TAN files via challan — verify current e-filing rules.
Split across family?
₹50L is per deductor-payer — not split trick across relatives.
NRI payee?
Section 195 — not 194M.
Your tax year is already running.
RNOR status, exit timing, and DTAA benefits all depend on decisions you make before you land. Don't guess.