Section 194J · TDS on professional and technical fees
Pay a professional? Cut 10% before you pay.
- Professional fees
- 10%
- Technical / call-centre
- 2%
- Director's remuneration
- 10% (no threshold)
- Annual trigger
- ₹30,000 per category
In plain English
Paying a lawyer, CA, consultant or director? Deduct 10% TDS on professional fees and royalties, and 2% on plain technical services or call-centre work. The trigger kicks in once yearly payments cross ₹30,000 per category — but a director's fee has no threshold at all.
| Meaning | Number |
|---|---|
| Professional fees | 10% |
| Technical / call-centre | 2% |
| Director's remuneration | 10% (no threshold) |
| Annual trigger | ₹30,000 per category |
Payments covered & their TDS rate
- Professional fees — 10% — lawyer, CA, doctor, architect, consultant
- Fees for technical services — 2% — managerial / technical / consultancy
- Royalty (other than films) — 10%
- Royalty for cinematographic films — 2%
- Non-compete fees u/s 28(va) — 10%
- Director's remuneration (not salary) — 10% — no threshold
- Call-centre operator payments — 2%
What this section covers
Section 194J applies to payments to residents for (i) professional services, (ii) fees for technical services, (iii) royalty, (iv) non-compete fees u/s 28(va), and (v) director's remuneration not chargeable as salary. Rates: 10% for professional services, royalty (other than cinematographic films) and non-compete fees; 2% for fees for technical services, royalty for cinematographic films, and call-centre payments; 10% for director's remuneration with no threshold. Trigger: annual payment exceeding ₹30,000 per category (no threshold for director's remuneration).
The legal text
“Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of— (a) fees for professional services, or (b) fees for technical services, or (ba) any remuneration or fees or commission… to a director of a company, or (c) royalty… shall… deduct an amount equal to ten per cent of such sum…”
Old Act vs New Act
| Aspect | Act, 1961 | Act, 2025 |
|---|---|---|
| Section | 194J | 393 |
| Topic | TDS on professional and technical fees | |
| Verdict | Consolidated under unified TDS Section 393 in ITA 2025 | |
| Notes | Under the Income-tax Act, 2025 TDS on professional/technical fees is dealt with within the consolidated TDS framework in Section 393 and the corresponding Schedule. The 10%/2% rate distinction and the ₹30,000 per-category threshold are retained — the citation changes from Section 194J to a quote under Section 393. | |
Common confusion
Fees for 'technical services' (TDS 2%) versus 'professional services' (TDS 10%) is a recurring litigation area. Routine technical/managerial work is FTS at 2%; advice involving specialised professional judgment is professional fee at 10%.
Who should know this
Related sections
Based on the official Income-tax Act, 1961 and the published Income-tax Act, 2025 as available on the Income Tax Department website. Always verify against the published Act and consult a qualified professional.