TDS Under Section 194J(A) and 194J(B)

TDS28/08/2021 Source: TDS


Section 194J

As per section 194J, any person not being an individual or a HUF, who is responsible for paying to a resident any sum by way of fees for professional services, or  technical services or royalty shall, at the time of payment or credit of such sum to the account of the payee, deduct an amount equal to 10 % as TDS.

It is responsibility of deductor to deduct TDS at the 10% on any sum paying as fees for professional services and other fees. However the TDS is required to be deducted if the amount of payment in a year exceeds Rs. 30,000.

So In case of payment does not exceed the Threshold exemption limits, TDS will not be deductible. 

Section 194J(A) and 194J(B)

The section 194J has been sub-divided now into two new section 194J(A) and section 194J(B). Every person excluding an individual or a HUF, making payment of fees to a resident for notified services, will be covered section 194J(A) and section 194J(B) in the Income Tax Act of India.

(i) Section 194J(A) of the Income Tax Act is related to TDS deduction on any sum paying as fees for Technical Services.

(ii) Section 194J(B) of the Income Tax Act is related to TDS deduction on any sum paying as fees for Professional Services. 

Professional Services are defined under Section 194J includes

  1. Medical
  2. Legal
  3. Engineering
  4. Architectural profession
  5. Accountancy
  6. Interior decoration
Section  Nature of Payment Rate of TDS  Rate of TDS if PAN not available Threshold exemption limits
Section 194J(A) 1. Fees for Technical Services
2. Royalty for sale
3. Call center
4. Distribution or exhibition of cinematographic films.
2% 20% Rs. 30,000
Section 194J(B) 1. Professional services
2. Royalty Payment
10% 20% Rs. 30,000