Section 194J · TDS on professional and technical fees
Pay a professional? Cut 10% before you pay.
- Professional fees
- 10%
- Technical services / call-centre
- 2%
- Director fees
- 10% (no threshold)
- Threshold (FY 2025-26)
- ₹50,000 per category
In plain English
Paying a lawyer, CA, consultant or tech-services provider? For FY 2025-26, TDS kicks in once payments of professional fees — or of technical-service fees — cross ₹50,000 in the year (each counted separately). Technical services, film-royalty and call-centre payments are taxed at 2%; other covered payments at 10%. A director's fee has no threshold at all.
| Meaning | Number |
|---|---|
| Professional fees | 10% |
| Technical services / call-centre | 2% |
| Director fees | 10% (no threshold) |
| Threshold (FY 2025-26) | ₹50,000 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 covers payments to residents for professional services, technical services, royalty, non-compete fees and director remuneration not taxed as salary. For FY 2025-26, the threshold is ₹50,000 per year for professional fees and separately for technical fees. Rates are 2% for technical services (other than professional services), royalty for films and call-centre payments, and 10% for other covered payments. Director fees have no threshold. (Before 1 Apr 2025 the threshold was ₹30,000.)
Read 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 Section 393 — thresholds reviewed | |
| Notes | Under the Income-tax Act, 2025 this TDS is part of the consolidated Section 393 (Section 393(1) Table Sl. 6(iii)). The ₹50,000 threshold already applied under the 1961 Act from 1 Apr 2025 — it was not introduced by the 2025 Act. | |
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.
What was checked
194J → 393(1) Table Sl. 6(iii): FY 2025-26 (1961 Act) thresholds and rates only. Table row checked against s.393 (current text). TDS rates & thresholds — FY 2025-26 (TRACES)
Related official updates