Section 194J TDS on professional fee and Technical service.
Professional fee mean service rendered by a person in the course of carrying on legal, medical, architectural or engineering profession or profession of accountancy or technical consultancy or interior decoration or advertising or any other profession notified under section 44 AA .
Technical services fee for technical services mean any consideration ( including any lump sum consideration ) for the rendering of any managerial, technical or consultancy services but does not including consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head salaries.
Which types covered
The following types of payments to residents are covered by this section:
fees for expertise
technical service fees
Directors’ compensation, excluding salaries (For e.g., sitting fees to attend board meetings)
payments in the form of non-compete fees (i.e., fees paid to refrain from engaging in any profession or business for a certain period of time and within specific geographic restrictions) or fees paid to refrain from disclosing any technical information or know-how.
Royalty mean consideration 9 including any lump sum consideration but excluding any consideration which would be the income of the receipt chargeable under the head capital gains
It alludes to the support given by a person in the practise of their chosen profession in the fields of medicine, law, architecture, or engineering. Accountancy, advertising, interior design, technical consulting, and any other professions listed by the CBDT Board under Section 44AA are also included.
According to income tax regulations, “fees for technical services” refers to managerial, technical, and consulting services but excludes payments that the beneficiary of such income considers to be salary.
Technical services are those that include the use of technical expertise or technological expertise.
Running and managing the client’s business falls within the definition of managerial services.
Consulting services can be viewed as advisory services where clients receive the essential counsel and consultation for their businesses.
According to the Supreme Court’s ruling, human services would be considered technical service. It wouldn’t offer any automated or robotic services.
In accordance with Section 44AA, the CBDT has as of this writing announced the professions of a film artist, a company secretary, and authorised representatives.
In accordance with Section 194J, the CBDT has also notified athletes, commentators, event coordinators, anchors, umpires and referees, physiotherapists, coaches and trainers, team physicians, and sports columnists.
Rate of TDS deductionas per TDS rate
If the payee is running a business of call centre 2%
If case fee for technical or royalty paid other than cinematographic 2%
If professional royalty paid 10%
Other proessional fee 10%
When TDS required to decudted
If payment exceed Rs. 30,000 in case of royalty payment
If Payment exceed Rs. 30,000 in case of Technical fee payment or proessional fee
Deducted TDs amount should be deposited to Central Government Account on or before 7th days of next month through challan no 281 online payment