Section 194J - Fees for professional or technical services - Income-tax Act, 1961

1 [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, 2 [ or ] 13 [ (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 ] 3 [ (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 15 [ 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 ) 12 [thirty thousand rupees], in the case of fees for professional services referred to in clause ( a ), or ( ii ) 12 [thirty thousand rupees], in the case of fees for technical services referred to in 5 [ clause (b), or ] 6 [ ( iii ) 12 [thirty thousand rupees], in the case of royalty referred to in clause (c), or ( iv ) 12 [ thirty thousand rupees], in the case of sum referred to in clause (d) : ] 7 [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 16 [ 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 :] 8 [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.] 14 [ 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) 9 [***] (3) 10 [***] 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; 11 [ ( 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. ---------------------- Notes :- 1. Sections 194J and 194K inserted by the Finance Act, 1995, w.e.f. 1-7-1995. 2. Inserted by the Taxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006. 3. Inserted by the Taxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006. 4. Substituted for five by the Finance Act, 2007, w.e.f. 1-6-2007. 5. Substituted for clause (b) : by the Taxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006. 6. Inserted by the Taxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006. 7. Inserted by the Finance Act, 2002, w.e.f. 1-6-2002. 8 . Inserted by the Finance Act, 2003, w.e.f. 1-6-2003. 9. Omitted by the Finance Act, 2003, w.e.f. 1-6-2003. Prior to their omission, sub-sections (2) and (3) read as under : (2) Where the Assessing Officer is satisfied that the total income of any person in receipt of the sum referred to in sub-section (1) justifies the deduction of income-tax at any lower rate or no deduction of income-tax, as the case may be, the Assessing Officer shall, on an application made by that person in this behalf, give to him such certificate as may be appropriate. (3) Where any such certificate is given, the person responsible for paying the sum referred to in sub-section (1) shall, until such certificate is cancelled by the Assessing Officer, deduct income-tax at the rates specified in such certificate or deduct no tax, as the case may be. 10. Omitted by the Finance Act, 2003, w.e.f. 1-6-2003. Prior to their omission, sub-sections (2) and (3) read as under : (2) Where the Assessing Officer is satisfied that the total income of any person in receipt of the sum referred to in sub-section (1) justifies the deduction of income-tax at any lower rate or no deduction of income-tax, as the case may be, the Assessing Officer shall, on an application made by that person in this behalf, give to him such certificate as may be appropriate. (3) Where any such certificate is given, the person responsible for paying the sum referred to in sub-section (1) shall, until such certificate is cancelled by the Assessing Officer, deduct income-tax at the rates specified in such certificate or deduct no tax, as the case may be. 11. Inserted by the Taxation Laws (Amendment) Act, 2006, w.e.f. 13-7-2006. 12. In the first proviso to sub-section (1), in clause (B), for the words twenty thousand rupees , wherever they occur, the words thirty thousand rupees has been substituted vide Finance Act, 2010, with effect from the 1st day of July, 2010. 13. Inserted vide Finance Act, 2012, w.e.f. 01-07-2012. 14. Inserted vide THE FINANCE ACT, 2017 w.e.f. 1st day of June, 2017 15. Substituted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2020 before it was read as 4 [ ten ] per cent of such sum 16. Substituted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2020 before it was read as the monetary limits specified under clause ( a ) or clause ( b ) of section 44AB