Section 194J - TDS on Professional/Technical Fees and Director's Remuneration
# TDS on Professional Fees, Technical Services, Royalty — Section 194J
## Rates
Nature of Payment
Rate
Fees for technical services (FTS)
2%
Royalty for sale/exhibition of cinematographic films
2%
Fees for professional services, royalty (other), non-compete fees
10%
Remuneration / fees / commission to a director (not in nature of salary)
10%
## Threshold
General threshold: ₹ 50,000 per FY for each category separately (FTS, royalty, professional fees, etc.).
No threshold for director's remuneration — TDS applies from Re. 1.
## Special Rules for Individual/HUF Payers
Individuals/HUFs need to deduct TDS u/s 194J only if turnover/gross receipts exceeded ₹ 1 crore (business) or ₹ 50 lakh (profession) in the preceding FY, AND the payment is not exclusively for the personal purpose of the individual/karta/member.
Worked example
### Example 1
Example 1 — Mr. Shyam receives ₹ 25,000 FTS and ₹ 20,000 royalty (separate categories)
Each payment is below the ₹ 50,000 threshold individually → No TDS.
(Threshold is applied separately to each category, not aggregated.)
### Example 2
Example 2 — ABC Ltd. pays ₹ 19,000 sitting fees to its director on 1.1.2026
No threshold applies to director's payments under section 194J.
TDS = ₹ 19,000 × 10% = ₹ 1,900.
### Example 3
Example 3 — Sundar (HUF) pays ₹ 55,000 to Dr. Srivatsan for surgery on a family member
Payment is for personal purpose of a family member → Section 194J not attracted regardless of HUF turnover. Also section 194M not attracted as payment < ₹ 50 lakh threshold.
⚠️ Common exam mistakes
Aggregating FTS and royalty for the ₹ 50,000 threshold — they are tested separately.
Applying the ₹ 50,000 threshold to director's payments — there is no threshold for directors.
Deducting from professional fees paid by an HUF for purely personal/family purposes.
Using 10% rate on FTS — current rate for pure FTS is 2%.
Bare-Act text Section 194J · Income-tax Act, 1961 · click to expand
Section 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... deduct an amount equal to ten per cent of such sum (two per cent in case of fees for technical services and royalty in respect of cinematograph films) as income-tax on income comprised therein.
Provided that no such deduction shall be made if such sum or aggregate of such sums credited or paid during the financial year does not exceed fifty thousand rupees.