Chetan Chauhan
Section 194J of the Income Tax Act pertains to the TDS on fees for professional or technical services. According to this section, any person, including an individual or a company, who is responsible for paying to any sum as fees for professional or technical services, is required to deduct TDS.
Table of Contents
- Different types of payments are covered under Section 194J
- Applicable TDS Rates under Section 194J
- What are the consequences of late deduction under 194J TDS?
- Threshold limit for deduction of TDS under Section 194J
- Who are liable to deduct TDS under section 194J
- Time Limit To Deposit TDS
- Who are required to comply with Section 194J?
Different types of payments are covered under Section 194J
Section 194J of the Income Tax Act covers various types of payments made for professional or technical services. Some examples of such payments include:
- Fees for professional services such as those provided by an engineer, architect, surveyor, accountants, technical consultants, interior decorators, company secretary, etc.
- Fees for technical services such as those provided by a technical expert or a technical consultant.
- Remuneration or fees for services provided by a director of a company to the company or its subsidiary.
- Commission or brokerage paid to a resident for services provided in connection with the sale or purchase of goods or services.
- Any payment made to a technical or professional institution, association, or body, whether incorporated or not, for carrying out any work or services.
Applicable TDS Rates under Section 194J
| Nature of Payment | Rate | Threshold Limit |
| sum paid or payable towards fees for technical services | 2% | Rs. 30,000 |
| sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films | 2% | Rs. 30,000 |
| Any other sum | 10% | Rs. 30,000 |
| If the payee fails to provide PAN | 20% | Rs. 30,000 |
What are the consequences of late deduction under 194J TDS?
If an individual or organization fails to deduct TDS interest will be charged on the amount of TDS that should have been deducted.
| If no deduction was made | Interest is 1% per month |
| If deduction was made but not paid to the government | Interest is 1.5% per month |
Threshold limit for deduction of TDS under Section 194J
The threshold limit for deduction of TDS under Section 194J of the Income Tax Act is Rs. 30,000 per financial year. This means that if the amount paid or credited to a contractor or sub-contractor during the financial year does not exceed Rs. 30,000, no TDS is required to be deducted.
However, if the amount paid or credited exceeds Rs. 30,000, TDS at the applicable rate must be deducted on the entire amount paid or credited, regardless of the threshold limit.
Who are liable to deduct TDS under section 194J
Section 194J of the Income Tax Act states that:
- Any individual or HUF carrying on business whose turnover does not exceed Rs 1 crore during the previous financial year are liable to deduct TDS under section 194J
- Any individual or HUF carrying on profession whose turnover does not exceed Rs 50 lakh during the previous financial year are liable to deduct TDS under section 194J
Time Limit To Deposit TDS
| Period | Due Date |
| April to February | 7th day from end of the month |
| March |
For government - 7th day from end of the month For non government - 30th April |
Note : If TDS is deducted on 16 May 2024 than, TDS must be deposited with 7th of June 2024 to avoid interest.
Who are required to comply with Section 194J?
| In case of business for Individual or HUF | If turnover exceeds Rs.1 crore |
| In case of business for Profession | If exceeds Rs. 50 lakhs |
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