{"id":7643,"date":"2025-07-11T07:39:06","date_gmt":"2025-07-11T07:39:06","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?post_type=glossary&#038;p=7643"},"modified":"2025-07-11T07:39:07","modified_gmt":"2025-07-11T07:39:07","slug":"section-194j-under-tds","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/section-194j-under-tds\/","title":{"rendered":"Section 194J under TDS"},"content":{"rendered":"<p><strong>Section 194J<\/strong> is a rule in the <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/income-tax-act\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Income Tax Act<\/a> that says:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>When you <strong>pay someone for professional or technical services<\/strong>, you must <strong>deduct <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/tds\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>TDS<\/a><\/strong> before making the payment.<\/p>\n<\/blockquote>\n\n\n\n<p>This section mostly applies to <strong>fees paid to doctors, lawyers, consultants, engineers, IT experts<\/strong>, and other professionals.<\/p>\n\n\n\n<h2 id=\"who-must-deduct-tds-under-section-194j\" class=\"wp-block-heading\"><strong>Who Must Deduct TDS Under Section 194J?<\/strong><\/h2>\n\n\n\n<p>TDS must be deducted by:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Companies<\/li>\n\n\n\n<li>Partnership firms<\/li>\n\n\n\n<li>Individuals\/HUF (only if turnover is over &#x20B9;1 crore for business or &#x20B9;50 lakh for profession)<\/li>\n<\/ul>\n\n\n\n<h2 id=\"types-of-payments-covered\" class=\"wp-block-heading\"><strong>Types of Payments Covered<\/strong><\/h2>\n\n\n\n<p>TDS under Section 194J applies to:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Professional fees<\/strong> &#x2013; Doctors, lawyers, chartered accountants, architects, designers, consultants, etc.<\/li>\n\n\n\n<li><strong>Technical services<\/strong> &#x2013; IT services, software development, technical support<\/li>\n\n\n\n<li><strong>Royalty<\/strong> &#x2013; For using intellectual property like patents, trademarks<\/li>\n\n\n\n<li><strong>Non-compete fees<\/strong> &#x2013; Paid to someone to not start a similar business<\/li>\n\n\n\n<li><strong>Director&#x2019;s remuneration<\/strong> (if not covered under salary)<\/li>\n<\/ol>\n\n\n\n<h2 id=\"tds-rates-under-section-194j\" class=\"wp-block-heading\"><strong>TDS Rates Under Section 194J<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Type of Service<\/th><th>TDS Rate<\/th><\/tr><\/thead><tbody><tr><td>Professional services<\/td><td>10%<\/td><\/tr><tr><td>Technical services<\/td><td>2%<\/td><\/tr><tr><td>Royalty or non-compete fees<\/td><td>10%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>If PAN is not provided:<\/strong> TDS = 20%<\/p>\n\n\n\n<h2 id=\"when-to-deduct-tds\" class=\"wp-block-heading\"><strong>When to Deduct TDS<\/strong><\/h2>\n\n\n\n<p>TDS must be deducted <strong>at the time of credit or payment<\/strong>, whichever is <strong>earlier<\/strong>.<\/p>\n\n\n\n<h2 id=\"threshold-limit\" class=\"wp-block-heading\"><strong>Threshold Limit<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>No TDS if payment is <strong>less than &#x20B9;30,000<\/strong> in a financial year <strong>per payee per category<\/strong><\/li>\n\n\n\n<li>If total exceeds &#x20B9;30,000, <strong>TDS is deducted on the entire amount<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 id=\"example\" class=\"wp-block-heading\"><strong>Example<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You pay a software consultant &#x20B9;50,000<\/li>\n\n\n\n<li>TDS = 2% of &#x20B9;50,000 = &#x20B9;1,000<\/li>\n\n\n\n<li>You pay &#x20B9;49,000 to the consultant and deposit &#x20B9;1,000 to the government<\/li>\n<\/ul>\n\n\n\n<h2 id=\"how-tds-is-reported\" class=\"wp-block-heading\"><strong>How TDS is Reported<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>File <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/tds-return\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">TDS return<\/a>s in <strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/form-26q\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Form 26Q<\/a><\/strong><\/li>\n\n\n\n<li>Issue <strong><a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/form-16a\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>Form 16A<\/a><\/strong> to the service provider as TDS certificate<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Section 194J is a rule in the <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/income-tax\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Income Tax<\/a> Act that says: When you pay someone for professional or technical services, you must deduct TDS before making the payment. This section mostly applies to fees paid to doctors, lawyers, consultants, engineers, IT experts, and other professionals. Who Must Deduct TDS Under Section 194J? TDS must [&#x2026;]<\/p>\n","protected":false},"author":9,"featured_media":0,"menu_order":0,"template":"","meta":{"footnotes":""},"class_list":["post-7643","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7643","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/9"}],"version-history":[{"count":1,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7643\/revisions"}],"predecessor-version":[{"id":7644,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7643\/revisions\/7644"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=7643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}