Section 194J of the Income Tax Act deals with the payments made in the form of professional or technical fees to doctors, lawyers, accountants, etc.


As per the rules and regulations of this section, an individual has to deduct the tax at the rate of 10% when payments are made to certain individuals.

What is Section 194J?

Section 194J of the IT Act deals with the tax deducted at source (TDS) on professional fees or fees for technical services. If the total receipts or turnover or sales of an individual or Hindu Undivided Family(HUF) surpasses the limit specified u/s 44AB-A and B, they will be covered under this section.

Payment Types Covered under Section 194J

TDS has to be deducted at the rate of 10% in case the the below-mentioned payments are received by the resident in the particular financial year: 

  • Professional service fee

  • Technical service fee

  • Royalty 

  • Payment made to directors except for salary

  • Non-compete fee as perSection 28(VA) of the Income Tax Act


  • Professional services

It is the individual's services for carrying on legal, medical, engineering or architectural professions. This includes advertising, accountancy, technical consultancy, interior decoration, or any other occupation approved by the CBDT board u/s 44AA.

  • Technical services

As per the IT rules, ‘technical services fees’ mean managerial, consultancy and technical services but do not include salary payments. Mining, assembly, and construction services will not be considered technical services.

Who Can Deduct TDS under Section 194J

Any individual paying for technical or professional services is expected to deduct TDS. However, the entities listed below are not expected to deduct tax at source on such payments:

  • If a HUF or an individual has a business and the turnover is under Rs.1 crore during the last fiscal year.

  • If a HUF or an individual practises a profession and the turnover is under Rs.50 lakhs during the last fiscal year.


Simply put, all entities (other than an individual/HUF who are not expected to do a tax audit the previous year) will have to deduct TDS while paying technical service or professional fees.

Threshold Limit for Tax Deducted at Source U/S 194J

  • The tax has to be deducted if the technical and professional service payment is more than Rs.30,000 for that particular year. 

  • This maximum limit of Rs.30,000 is applicable for each payment or item independently. However, there is no such limit for payments (fees, remuneration or commission). 

  • The tax has to be deducted even if the amount is small.

Time of TDS Deduction

The tax deducted at source should be made when-

  • Passing those payment entries into the accounts

  • While making the payment of the expense incurred or whichever is earlier.

Time limit to deposit TDS u/s 194J


Deductors who are not the government 

Deductors from the government

Payments that are made before 01 March

7th day from the end of the month

7th day from the end of the month

Payments that are made in March

30 April 

Tax payment is made during the day of technical or professional payment to the payee. The challan is to be deposited by the 7th day from the end of March.

Rate of TDS deduction

The TDS deduction rates under Section 194J of the Income Tax Act are as below: 

Payment Nature

Section 194J TDS Rate

Technical services fee payment


Call centres fee payment


Royalty paid for the screening, distribution and sale of a movie


Other payments


In case the individual fails to provide PAN information


Implications of Delayed Deduction/Non-Deduction of TDS

The implications of failure to deduct tax or failure to pay the tax to the IT authorities after it is deducted are listed below:

  • Disallowance of a portion of the expenditure

Around 30% of the expense will be disallowed in a financial year in which the expense is claimed (taken to the P/L account). However, 30% of the disallowed expense can be re-allowed in the year the tax was paid to the government

  • Interest is applied till the payment date

If there is a delay in tax payment, then interest has to be paid to the government along with the tax. The interest rate is calculated in the following way

  • If TDS is deducted but not made to the government

Interest that has to be paid will be 1.5% each month/portion of the month from the time tax was required to be paid up to the date of payment.

  • If no tax deduction is made

Interest that has to be paid will be 1% each month/portion of the month from the time tax was required to be paid up to the date of payment.

Frequently Asked Questions

Professional fees are a payment made to individuals specialising in specific arts, science, and commerce fields. It includes fees paid to professionals like doctors, lawyers, advertisers, chartered accountants, etc.

You can claim TDS u/s 194J if your net income is lower than the total taxable income. File ITR to get a refund.

TDS is deducted if the payment towards technical or professional services goes over Rs.30,000 per annum.

No, it is mandatory to deduct TDS on professional fees.

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