Royalty TDS for brass

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This query is : Resolved

Magesh (Querist)

15 January 2025 Sir,
We are doing the railway projects from maharashtra , request you to kindly confirm us whether, we are paying the directly quarries for projects Royalty Brass TDS applicable or not applicable
Please confirm,

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

12 August 2025 TDS on Royalty under Section 194Q/194R/194M/194N?
For Royalty payments, the relevant TDS provision is Section 194Q or Section 194J, but specifically:

Section 194Q: Applies to purchase of goods exceeding Rs. 50 lakh — not relevant for royalty.

Section 194J: Applies to professional fees and royalty payments.

Section 194M and 194N: Other payments, not royalty.

Royalty Payment TDS — Section 194J
Royalty paid to quarries is subject to TDS under Section 194J of the Income Tax Act.

The rate of TDS is 10% on royalty payments.

This applies to payments made to Indian residents.

If payment is to a non-resident, Section 195 applies.

Applicability for Quarry Payments in Maharashtra
If your company is paying royalty to quarries (which is generally a form of mineral royalty or lease rent for extraction rights), TDS @ 10% under Section 194J applies.

You should deduct TDS at the time of credit or payment, whichever is earlier.

The quarry owner should provide you with their PAN to avoid higher TDS.

Summary:
Payment Type TDS Section Rate Applicability
Royalty to Quarries 194J 10% Applicable on royalty paid to Indian residents

Additional Notes:
Check if the royalty payment is in the nature of rent or lease money; classification can affect the TDS section.

Make sure to deduct TDS and file TDS returns (Form 26Q) timely.

Obtain and verify the PAN of the payee.

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