TDS on Professional Fees, Technical Services

TDS should be deducted on any sum paid by any person to a resident by way of professional or technical services under section 194J of Income Tax Act.

TDS should be deducted @ 10% on the following payments either at the time payment or at the time of credit to the account of the payee whichever is earlier:

• Fees for professional services
• Fees for Technical Services
• Any sum paid to a director other than the amount on which tax is deductible under section 192.  The sum includes remuneration or fees or commission
• Royalty
• Any sum referred to in clause (va) of section 28

No Deduction of TDS

• TDS need not to be deducted if the aggregate sum credited or paid or likely to be credited or paid during the financial year doesn’t exceed Rs.30000/- (Rupees Thirty Thousand).

• No TDS to be deducted if the sum credited or paid before 1^st July 1995.

• Individuals or Hindu undivided family (HUF) need not to deduct TDS, if their total sales, gross receipts or turnover from their business or profession doesn’t exceed Rs.1 Crore in case of business and Rs.25 Lakhs in case of profession.

• No individual or HUF need not to deduct TDS, if the sum paid by way of professional services exclusively for personal purposes of such individual or any member of HUF.

Other Points:

• Professional Services includes the services of legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, advertising and other services as may be notified by the Board for the purposes of section 44AA or of this section.

• Any sum referred above (section 194J) is credited to any account, whether called ‘Suspense account’ or by any other name in the books of accounts of the person liable to pay such sum shall be deemed to be credit of such sum to the account of the payee and all the provisions of this section shall apply accordingly.

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