TDS on Professional Fees — Rate & Threshold
Updated June 2026 · VerifiedWhat Is the TDS Rate on Professional Fees?
The TDS rate on professional and technical services fees is 10% of the gross payment. For certain technical services (like call centre operations), a reduced rate of 2% applies.
| Nature of Payment | Section (New / Legacy) | Threshold | TDS Rate | No-PAN Rate |
|---|---|---|---|---|
| Professional services (CA, lawyer, doctor, architect, etc.) | 393 (earlier 194J) | ₹30,000/year | 10% | 20% |
| Technical services | 393 (earlier 194J) | ₹30,000/year | 2% | 20% |
| Royalty | 393 (earlier 194J) | ₹30,000/year | 10% | 20% |
| Non-compete fees | 393 (earlier 194J) | ₹30,000/year | 10% | 20% |
Who Must Deduct TDS on Professional Fees?
Any person (other than an individual or HUF whose books are not subject to audit) making payment for professional or technical services must deduct TDS. This includes:
- Companies (private & public)
- Partnership firms and LLPs
- Government bodies and local authorities
- Trusts, societies, and associations
- Individuals and HUFs liable to tax audit in the preceding Tax Year
When Should TDS Be Deducted?
TDS must be deducted at the earlier of:
- The date of credit of the amount to the payee's account (including suspense account), or
- The date of actual payment (cash, cheque, draft, or any other mode).
The deducted TDS must be deposited by the 7th of the following month. For the month of March, the due date is 30th April.
What Is the Difference Between Professional Fees TDS and Contractor TDS?
| Parameter | Professional Fees (earlier 194J) | Contractor (earlier 194C) |
|---|---|---|
| Section (Income-tax Act, 2025) | 393 | 393 |
| TDS rate — Individual/HUF | 10% | 1% |
| TDS rate — Others | 10% (2% for technical services) | 2% |
| Threshold | ₹30,000/year | ₹30,000 per contract or ₹1,00,000/year |
| Nature | Professional/technical expertise | Work contract, labour, supply |
Frequently Asked Questions
Is TDS applicable on professional fees below ₹30,000?
No. If the aggregate payment to a professional during the Tax Year does not exceed ₹30,000, TDS is not required.
Is GST excluded from TDS calculation on professional fees?
Yes. TDS is deducted on the amount excluding GST, provided GST is separately shown in the invoice.
What if I pay a freelancer — is TDS on professional fees applicable?
Yes. Payments to freelancers for professional or technical services exceeding ₹30,000 in a Tax Year attract TDS at 10% under Section 393.
Can a professional request lower TDS deduction?
Yes. The payee can apply for a lower deduction certificate from the Assessing Officer. On receipt, the deductor deducts TDS at the rate specified in the certificate.
Is Section 194J still valid after 01-Apr-2026?
No. Section 194J of the Income-tax Act, 1961 was repealed on 01-Apr-2026. The corresponding provision is now part of Section 393 of the Income-tax Act, 2025.