TDS on Professional Fees (194J)
Work out TDS on professional and technical fees live — the right rate, the ₹50,000 threshold, the no-PAN 20% rule and your net payable, all on one screen.
How your TDS is worked out
TDS deducted? Let a CA file your return
We handle 26Q/24Q returns, challans and Form 16A — accurate and on time.
Disclaimer: Indicative estimate under Section 194J for FY 2026-27 (AY 2027-28); also applies to FY 2027-28. Actual TDS may vary with the type of payee, lower/nil-deduction certificates and aggregate payments during the year. Confirm with your tax advisor.
Section 194J — the essentials
Section 194J requires any person (other than an individual/HUF below the tax-audit limit) to deduct TDS when paying fees for professional services, fees for technical services, royalty, non-compete fees or directors' remuneration. TDS is deducted at the time of credit or payment, whichever is earlier, and deposited to the government against the payee's PAN.
Professional (10%) vs technical (2%)
The single most common 194J mistake is deducting 10% on technical-service fees that actually attract only 2%. The lower 2% rate covers fees for technical services and call-centre operators; everything else professional stays at 10%.
| Legal, medical, accountancy fees | 10% |
| Engineering, architectural, CA/CS | 10% |
| Royalty & non-compete fees | 10% |
| Directors' remuneration (non-salary) | 10% |
| Fees for technical services (FTS) | 2% |
| Call-centre operators | 2% |
| Managerial / consultancy tech input | 2% |
| No valid PAN — either category | 20% |
The ₹50,000 threshold & no-PAN 20% rule
Budget 2025 raised the 194J threshold from ₹30,000 to ₹50,000 with effect from FY 2026-27. No TDS is deducted until the aggregate payment to a payee in the year crosses ₹50,000 — but once it does, TDS applies on the whole amount, not just the excess. If the payee has not furnished PAN, Section 206AA overrides everything and TDS is a flat 20%.
Good to know
Aggregate, not per-bill
The ₹50,000 threshold is tested on the total paid to a payee in the financial year — not per invoice. Two ₹30,000 bills to the same consultant cross the limit, so TDS applies on the full ₹60,000.
No PAN = 20%
Under Section 206AA, if the payee fails to furnish a valid PAN, TDS is deducted at the higher of the 194J rate or 20% — in practice, a flat 20% for both professional and technical fees.
Who must deduct
Individuals and HUFs deduct 194J only if their turnover crossed the tax-audit limit in the previous year. Companies, firms and LLPs deduct regardless of turnover.
Deposit & return
TDS is paid to the government by the 7th of the next month and reported quarterly in Form 26Q, with Form 16A issued to the payee as proof of the credit.
At what rate is TDS deducted under section 194J?
10% for professional services, royalty and non-compete fees; 2% for fees for technical services, for a payee engaged only in the business of operating a call centre, and for royalty relating to the sale or exhibition of cinematographic films.
What is the threshold?
₹50,000 in a financial year for each category of payment, raised from ₹30,000 with effect from 1 April 2025. The limit applies separately to professional fees, technical fees, royalty and non-compete fees.
What counts as a professional service?
Legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration and advertising, along with the other professions notified under section 44AA — including film artists, company secretaries and authorised representatives.
What is the difference between professional and technical services?
Technical services involve managerial, technical or consultancy services, and attract 2%; professional services under section 44AA attract 10%. The distinction matters because the department frequently disputes the classification of consultancy arrangements.
Do individuals have to deduct under 194J?
Only if their accounts were subject to tax audit in the preceding year. Otherwise a large payment to a professional may still fall under section 194M at 2% above ₹50 lakh.
Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.