Section 194J of Income Tax Act "Fees for professional or technical services"
194J. (1) Any person, not being an individual or a Hindu
undivided family, who is responsible for paying to a
resident any sum by way of-
(a) fees for professional services, or
(b) fees for technical services, or
(ba) any remuneration or fees or commission by whatever name
called, other than those on which tax is deductible under
section 192, to a director of a company, or
(c) royalty, or
(d) any sum referred to in clause (va) of section 28,
shall, at the time of credit of such sum to the account
of the payee or at the time of payment thereof in cash or by
issue of a cheque or draft or by any other mode, whichever
is earlier, deduct an amount equal to 55[two per cent of
such sum in case of fees for technical services (not being a
professional services) or royalty where such royalty is in
the nature of consideration for sale, distribution or
exhibition of cinematographic films and ten per cent of such
sum in other cases,] as income-tax on income comprised
therein :
Provided that no deduction shall be made under this section-
(A) from any sums as aforesaid credited or paid before the
1st day of July, 1995; or
(B) where the amount of such sum or, as the case may be, the
aggregate of the amounts of such sums credited or paid or
likely to be credited or paid during the financial year by
the aforesaid person to the account of, or to, the payee,
does not exceed-
(i) thirty thousand rupees, in the case of fees for
professional services referred to in clause (a), or
(ii) thirty thousand rupees, in the case of fees for
technical services referred to in clause (b), or
(iii) thirty thousand rupees, in the case of royalty
referred to in clause (c), or
(iv) thirty thousand rupees, in the case of sum referred to
in clause (d) :
Provided further that an individual or a Hindu undivided
family, whose total sales, gross receipts or turnover from
the business or profession carried on by him exceed 56[one
crore rupees in case of business or fifty lakh rupees in
case of profession] during the financial year immediately
preceding the financial year in which such sum by way of
fees for professional services or technical services is
credited or paid, shall be liable to deduct income-tax under
this section :
Provided also that no individual or a Hindu undivided family
referred to in the second proviso shall be liable to deduct
income-tax on the sum by way of fees for professional
services in case such sum is credited or paid exclusively
for personal purposes of such individual or any member of
Hindu undivided family:
Provided also that the provisions of this section shall have
effect, as if for the words "ten per cent", the words "two
per cent" had been substituted in the case of a payee,
engaged only in the business of operation of call centre.
(2) [***]
(3) [***]
Explanation.-For the purposes of this section,-
(a) "professional services" means services rendered by a
person in the course of carrying on legal, medical,
engineering or architectural profession or the profession of
accountancy or technical consultancy or interior decoration
or advertising or such other profession as is notified by
the Board for the purposes of section 44AA or of this
section;
(b) "fees for technical services" shall have the same
meaning as in Explanation 2 to clause (vii) of sub-section
(1) of section 9;
(ba) "royalty" shall have the same meaning as in Explanation
2 to clause (vi) of sub-section (1) of section 9;
(c) where any sum referred to in sub-section (1) is credited
to any account, whether called "suspense account" or by any
other name, in the books of account of the person liable to
pay such sum, such crediting shall be deemed to be credit of
such sum to the account of the payee and the provisions of
this section shall apply accordingly.
What is Direct payment? What is Salary? Section 191 and 192 of Income Tax Act 1961
What are Dividends? Section 194 of Income Tax Act 1961
What is Rent? Section 194 I of Income Tax Act 1961
What is Interest other than Interest on securities? Section 194A of Income Tax Act 1961
What is Payments to contractors? Section 194C of Income Tax Act 1961