TDS on Professional Fees —
10% Above Rs 50,000
The Section 194J TDS rate on professional and technical fees, the new Rs 50,000 threshold from Budget 2025, who must deduct, the no-PAN rate and the deposit and return due dates.
TDS on professional fees is deducted at 10% under Section 194J once the aggregate payment to a payee crosses Rs 50,000 in a financial year (raised from Rs 30,000 by Budget 2025, effective 1 April 2025). Technical services are deducted at 2%, royalty and non-compete fees at 10%, and 20% if the payee does not furnish a PAN. Any person liable to tax audit — and every company, firm or LLP — must deduct it. Under the Income-tax Act, 2025 this provision is renumbered as Section 393 from AY 2026-27.
Budget 2025 raised the Section 194J threshold from Rs 30,000 to Rs 50,000 a year, effective 1 April 2025. Older guides still show Rs 30,000 — for FY 2025-26 and FY 2026-27 the correct figure is Rs 50,000, and it is checked separately for each category (professional fees, technical fees, royalty, non-compete).
Section 194J TDS Rates & Thresholds
Rates for FY 2025-26 by nature of payment, with the reduced 2% for technical services and the higher rate where PAN is not quoted.
| Nature of Payment | Section (New / Legacy) | Threshold | TDS Rate | No-PAN Rate |
|---|---|---|---|---|
| Professional services (CA, lawyer, doctor, architect) | 393 (earlier 194J) | Rs 50,000/year | 10% | 20% |
| Technical / consultancy services (incl. call centre) | 393 (earlier 194J) | Rs 50,000/year | 2% | 20% |
| Royalty | 393 (earlier 194J) | Rs 50,000/year | 10% | 20% |
| Non-compete fees | 393 (earlier 194J) | Rs 50,000/year | 10% | 20% |
| Director remuneration (non-salary) | 393 (earlier 194J) | No limit | 10% | 20% |
Threshold is computed separately for each category, not as a single combined limit. Director remuneration (other than salary) has no threshold — TDS applies from the first rupee.
Deducting TDS on a CA, consultant or freelancer bill? Get your rate and challan checked.
Talk to a TDS Expert →Who Must Deduct TDS on Professional Fees?
Any person paying for professional or technical services must deduct 194J TDS, except an individual or HUF whose books were not subject to tax audit in the preceding financial year. In practice this covers:
- Companies — private and public
- Partnership firms and LLPs
- Government bodies and local authorities
- Trusts, societies and associations
- Individuals and HUFs who were liable to tax audit in the previous year
To deduct TDS you must hold a TAN, deposit the tax by challan and file a quarterly TDS return (Form 26Q). Failing to deduct or deposit attracts interest at 1%/1.5% per month, plus disallowance of 30% of the expense under Section 40(a)(ia).
A salaried individual or a small HUF not under tax audit does not deduct 194J TDS on personal payments (for example, paying your own CA or doctor).
When to Deduct & Deposit — Due Dates
TDS under 194J is deducted at the earlier of credit to the payee's account (including any suspense account) or actual payment by cash, cheque or any other mode.
| Event | Due date |
|---|---|
| Deposit of TDS (Apr–Feb) | 7th of the following month |
| Deposit of TDS for March | 30 April |
| TDS return Form 26Q — Q1 (Apr–Jun) | 31 July |
| TDS return Form 26Q — Q2 (Jul–Sep) | 31 October |
| TDS return Form 26Q — Q3 (Oct–Dec) | 31 January |
| TDS return Form 26Q — Q4 (Jan–Mar) | 31 May |
Form 16A (TDS certificate) is issued within 15 days of the return due date. Late deposit attracts interest of 1.5% per month.
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Get TDS Return Filing →Professional Fees (194J) vs Contractor (194C)
The wrong section means the wrong rate. Professional fees (194J) cover intellectual or specialised expertise; contractor payments (194C) cover work, labour or supply contracts.
Professional / technical fees
- Rate 10% (2% for technical services)
- Threshold Rs 50,000 per category / year
- CA, lawyer, doctor, architect, consultant
- Royalty, non-compete, director fees
- Renumbered Section 393 from AY 2026-27
Contractor / sub-contractor
- Rate 1% (individual/HUF) or 2% (others)
- Threshold Rs 30,000 per contract or Rs 1,00,000/year
- Works contracts, labour, supply, transport
- Physical work, not intellectual expertise
- Also consolidated under the 2025 Act
TDS under 194J is deducted on the fee excluding GST, provided the GST component is shown separately on the invoice. If GST is not separately indicated, TDS applies to the whole invoice value. This is different from GST TDS under Section 51, which is a separate levy.
It is 194J (professional) if
- You pay a CA, lawyer, doctor, architect or engineer
- You pay for consultancy, technical or managerial services
- The payment is royalty, non-compete or director sitting fees
It is likely 194C (contractor) if
- You pay for a works or labour contract
- You pay a transporter, caterer or event supplier
- The vendor supplies goods or manual work, not expertise
TDS on Professional Fees — Frequently Asked Questions
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194J TDS — Deducted, Deposited & Filed Right
From choosing 10% vs 2%, applying the new Rs 50,000 threshold and depositing challans to filing Form 26Q and issuing Form 16A, TaxClue's CA-led team handles your professional-fees TDS end to end — 100% online, across India.