Compute TDS on professional services (10%), Fees for Technical Services (FTS - 2%), call center operators (2%), and director fees.
Deduct TDS at credit or payment and deposit by 7th of next month via Form 26Q.
Section 194J of the Income Tax Act requires any person (other than an individual or HUF not subject to tax audit) making payments to resident professionals or technical consultants to deduct tax at source.
10% Rate: Applies to notified professional services (Legal, Medical, Accountancy, Architecture, Interior Decoration) and non-cinematography royalties.
2% Concessional Rate: Applies to Fees for Technical Services (FTS), software development contracts, IT services, and call center businesses.
Payments made to company directors (sitting fees, commissions, or consulting fees not taxable under Section 192 Salaries) attract TDS at 10% without any threshold limit (even on ₹5,000 sitting fees).
| Service Category | Statutory TDS Rate | Annual Exemption Threshold |
|---|---|---|
| Professional Services (Lawyers, CAs, Doctors, Architects) | 10% | ₹30,000 / FY |
| Fees for Technical Services (FTS / IT / Software) | 2% | ₹30,000 / FY |
| Call Center Operations | 2% | ₹30,000 / FY |
| Director Sitting Fees & Remuneration | 10% | Nil (No Threshold) |
Yes. The ₹30,000 annual threshold applies separately for: (1) Professional fees, (2) Technical fees, (3) Royalty, and (4) Non-compete fees.
No. As per CBDT Circular 23/2017, TDS is deducted only on the professional fees component excluding separately billed GST.
No. Individuals and HUFs paying professional fees exclusively for personal purposes are exempt from deducting TDS under Section 194J.