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194J
Section 194J TDS Rate FY 2026-27
TDS on fees for professional or technical services, royalty and director fees: rate, threshold, who deducts, and the new section number under the Income-tax Act 2025.
Quick answer
- TDS rate
- 2% / 10%
- Threshold
- ₹50,000 per category per year (no threshold for director fees)
- Old section (1961 Act)
- Section 194J
- New section (2025 Act, from 1 Apr 2026)
- Section 393(1), Table Sl. No. 6(iii)
- Without PAN
- 20% if the payee does not furnish a valid PAN.
What changed: The threshold was ₹30,000 up to 31 March 2025. It was raised to ₹50,000 from 1 April 2025.
194J TDS rate chart
| Nature of payment | Rate |
|---|---|
| Fees for technical services, call centre operations, royalty for sale/distribution/exhibition of films | 2% |
| Professional services, other royalty, non-compete fees | 10% |
| Fees or commission to a director (other than salary), no threshold | 10% |
Who deducts and when
Who has to deduct
Any person other than an individual or HUF, plus individuals and HUFs whose accounts were required to be audited in the preceding year (an individual or HUF need not deduct on professional fees for personal purposes).
When to deduct
At the time of credit or payment, whichever is earlier.
Points to remember
- Professional services include legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration and advertising services, and services of notified professions.
- The ₹50,000 limit applies separately to each category (professional fees, technical fees, royalty, non-compete fees).
- Fees paid to a director that are not salary attract TDS from the first rupee.
- Where GST is shown separately on the invoice, TDS is generally deducted on the value excluding GST.
Worked example
A company pays a chartered accountant ₹80,000 (excluding GST) for audit support during the year.
TDS at 10% = ₹8,000.
Section 194J TDS calculator
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Applicable rate –
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Frequently Asked Questions
What is the TDS rate under Section 194J?
2% for fees for technical services, call centre operations, royalty for sale/distribution/exhibition of films; 10% for professional services, other royalty, non-compete fees; 10% for fees or commission to a director (other than salary), no threshold.
What is the threshold limit for TDS under 194J?
₹50,000 per category per year (no threshold for director fees). The threshold was ₹30,000 up to 31 March 2025. It was raised to ₹50,000 from 1 April 2025.
What is the new section for 194J under the Income-tax Act 2025?
From 1 April 2026 the Income-tax Act 2025 replaces the 1961 Act. TDS on fees for professional or technical services, royalty and director fees (old Section 194J) is now covered by Section 393(1), Table Sl. No. 6(iii). The rate and threshold carried over unchanged.
Who has to deduct TDS under 194J?
Any person other than an individual or HUF, plus individuals and HUFs whose accounts were required to be audited in the preceding year (an individual or HUF need not deduct on professional fees for personal purposes).
When should TDS under 194J be deducted?
At the time of credit or payment, whichever is earlier.
What is the TDS rate under 194J if PAN is not available?
20% if the payee does not furnish a valid PAN.
What is the due date for depositing TDS under 194J?
Generally by the 7th of the following month. For tax deducted in March, the due date is 30 April. Government deductors paying without a challan must deposit on the same day.
What happens if TDS under 194J is not deducted or deposited on time?
Interest is charged at 1% per month (or part of a month) from the date tax was deductible to the date it is deducted, and at 1.5% per month from deduction to deposit. Late filing fees and penalties can also apply, and for a business, 30% of the expense may be disallowed.
What is the difference between 2% and 10% under 194J?
Fees for technical services, call centre operations and certain film royalties are taxed at 2%. Fees for professional services, other royalties and non-compete fees are taxed at 10%.
What is the 194J threshold for FY 2025-26 and FY 2026-27?
The threshold is ₹50,000 per category in the year for both years. It was ₹30,000 until 31 March 2025.
Section 393 table references are based on the Income-tax Act, 2025 as published. Verify the serial number against the official text before quoting it in a return or notice reply.
Other TDS sections
TDS on common payments
TDS on Rent
10% / 2%
TDS on Salary
Slab rates (average)
TDS on Purchase of Goods
0.1%
TDS on Property Purchase
1%
TDS on Sale of Property
1% (resident) / 12.5%+ (NRI)
TDS on Commission
2%
TDS on Professional Fees
10% / 2%
TDS on Contractor Payments
1% / 2%
TDS on Partners' Remuneration
10%
TDS on FD Interest
10%
TDS on GST (TDS under GST)
2% (1% CGST + 1% SGST, or 2% IGST)
TDS on Cash Withdrawal
2% (5% for non-filers above ₹1 crore)