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TDS on legal fees

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Ryan Lasrado

CEO

96 Points Posted on 01 December 2021

A client has to pay a US law firm legal fees for rendering services in the USA. Will the TDS be at 40% plus cess ?

Replies (2)

Quick Summary

This discussion clarifies the Tax Deducted at Source (TDS) applicable to legal fees paid to a US law firm for services rendered in the USA. It references Section 194J of the Income Tax Act, which governs TDS on professional or technical fees. The key rates and threshold limits for various professional services are outlined, helping to determine the correct TDS percentage.

CA Aakarsh Jain

10436 Points Posted on 04 December 2021

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debora M

BUSINESS DEVELOPMENT MANAGER

1697 Points Posted on 14 December 2021

Section 194J TDS on Professional or Technical Fees

Nature of payment	Threshold limit	Rate of tax
Fees for professional services	Rs. 30,000	10%
Fees for technical services and payment to call centers	Rs. 30,000	2% (for FTS- 10% upto FY 19-20)
Remuneration or fees to Director (other than 192)	NIL	10%
Royalty	Rs. 30,000	10%