194J - technical services egs

There is no exclusive list of services which shall be covered under Fee for technical d
service but as per the Explanation 2 to section 9 (1) (vii).

‘Fees for technical services’ means any consideration for the rendering of any managerial, consultancy, or technical services. It includes the provision of services of technical or other personnel. The term ‘Fees for technical services’ doesn’t include consideration for any construction, mining, assembly or like project undertaken by the recipient or consideration chargeable under the head ‘salary’.

The type of payments to residents covered under this section are as follows:

1. Professional fees

2. Fees for technical services

3. Remuneration paid to directors excluding salary (For e.g., sitting fees to attend board meetings)

4. Royalty

5. Payments in the nature of non-compete fees (i.e., fees paid to not carry on any business or profession for a specified time and within certain geographical boundaries) or fees paid to not share any technical knowledge or know-how.

It implies to the services rendered by an individual for consultancy, technical or managerial services.

Services such as assembly, mining, construction is not considered as technical services as income from the same would come under head salary of the recipient