This is Ravi Varma In this article I will tell about section 194j.
- Definition of Section 194j
According to Income Tax ACT, when we pay professional fees, technical fees, royalty to any person, then we deduct TDS under section 194j and deposit it to the government.
- What are the fees to be covered under section 194j?
- TDS on professionals fees
- TDS on technical fees
- Non compet fees
- Directors fees
- Who is the Payer?
How any person other than individual or HUF is liable to pay TDS (TDS is required to be deducted in case of individual and HUF if the turnover of the year exceeds 1 crore in case of business or gross receipt in case of professional 50 lakhs)
- Who is the Payee?
He must be a resident of India.
- Tax Rates?
Within TDS, all services are divided into different rate categories.
- Payment made to call center TDS will be charged@:- 2%
- Fees for technical services TDS will be charged@:- 2%
- Royalty for Sale,Distribution,Extubation of Films TDS will be charged@:- 2%
- Fees for professional services TDS will be charged@:- 10%
- Other case TDS will be charge @10%
- The Government of India has made a limit on every category of TDS, if any payment is made in excess of this limit, then the government charges TDS on it.
- The professional fee is up to Rs 30000 per annum.
- The Technical service fee is up to Rs 30000 per annum.
- The royalty is up to Rs 30000 per annum.
- The Compete fees is up to Rs 30000 per annum.
- There is no limit prescribed by the government for the deduction of the director’s fee under TDS.
The extent of TDS depends only on the nature of payment and not the payee.
TDS will not be applicable if an individual / HUF pays professional fees or royalty to someone for their personal work.