Let Tax2Win experts file your belated return & claim your TDS
- Simple
- Secure
- Smart
Check the applicability, exemption limits, rate, example, definitions, consequences on non-compliance for the FY 2020-21(AY 2021-22)
Section 194J of the income tax covers TDS deduction on fees for professional or technical services. This section covers doctors, accountants, engineers, interior designers, architects and also people associated with advertising field. In this guide will explain you the all the provisions related to section 194J of the income tax.
Section 194J stated that any person who is paying fees to any resident person for specified services, then TDS is required to be deducted u/s 194J.However,TDS is to be deducted when amount of payment in a year exceeds Rs.30,000/- at the rate of 10%.
As per this section, any person (but not an individual or HUF) who pays to a resident fees for professional or technical services,will be required to deduct tax at source u/s 194J.
However, individual or HUF will be required to deduct TDS if they are liable to audit u/s 44AB (a) and (b).
Person here means :
Any consideration (including any lump sum consi-deration) for the rendering of any
but does not include consideration for any
This limit of Rs. 30,000/- is not a total limit for all services.It shall be calculated individually for payment as professional fees or technical fees or royalty or non-competence fees.
Example 194J applicability : Following payments are made to Mr. A
Particulars | Amount |
---|---|
Payment made for professional services | Rs. 25,000 |
Payment made for technical services | Rs. 20,000 |
Total payment to Mr. A | Rs. 45,000 |
TDS is not required to be deducted in above case |
The rate of tax deduction u/s 194J is 10%.
And the time of deduction is earlier of,
- The credit of income to the account of the payee (receiver) or
- Actual payment (in cash, cheque, draft or other modes).
Particular | Rate of TDS (if PAN available) | Rate of TDS (if PAN not available) |
---|---|---|
Payment given to resident person | 10% | 20% |
Payment given to the business of running only call center | 2% | 20% |
These are the exception to section 194J applicability:
CBDT has made some special announcements relating to implications of section 194J which are as follows:
Any payment made for routine maintenance contracts (including the supply of spares) will be liable to TDS u/s 194C. But if such payment is made for giving any technical services then Section 194J will become applicable.
Any payment made to recruitment agencies (like Monster India or Naukri.com etc) will be liable to TDS u/s 194J.
The TDS under this section will be applicable on the amount (excluding GST) only if the GST value is shown separately on the bill.
Any payment (in the form of commission) paid by a media house (like TimesNow) to any advertising agency (like FoxyMoron) will be liable to TDS u/s 194J.
Given below are time limit to deposit the TDS with government :
Particular | Time limit to deposit TDS |
---|---|
If the amount is paid or credited in the month of March | On or before 30th April |
If the amount is paid or credited in the month other than March | Within 7 days from the end of the month is which deduction is made |
After depositing TDS to the government, quarterly TDS return in form 26Q is also required to be filed.Given below are the due dates :
Particulars | Due Date |
---|---|
April - June | 31st July |
July - September | 31st October |
October-December | 31st January |
January - March | 31st May |
TDS statement known as Form 16A is issued by the specified person who is required to deduct TDS. Form 16A is issued to the deductee (i.e. whose TDS deducted from the income). Given below are the due dates of issuing TDS certificate :
Particulars | Due Date |
---|---|
15th Aug | 31st July |
July - September | 15th November |
October - December | 15th February |
January - March | 15th June |
Particular | Rate of Interest |
---|---|
When TDS not deducted | 1% per month or part of the month |
When TDS deducted but not deposited to the government | 1.5% per month or part of the month |
However if TDS is deposited in subsequent years then expense will be allowed in the year of payment of TDS.
Yes, TDS deducted can be claimed as a refund after considering all his income. ITR Form 3 or 4 can be filed accordingly.
ITR Form4 can be used if 194J receipt is less than Rs. 50 lakhs otherwise ITR 3.
It mainly depends on whether there is an employer- employee exists or not.
It would be covered under 194J, if the assignment bill exceeds Rs. 30000/- p.a.but in above case total is only Rs. 20000/- so no TDS liability.
No, it’s not compulsory to mention assets while filing ITR.
It can be checked by Login into Traces and View your 26AS.
ITR 3 or 4 is appropriate to be used as 194J related to professional and technical.
ITR-1 can be filed if any professional services are rendered is not the business of the assessee and it has been rendered casually.
No, stipend does not come under professional tax. It may come under 192 subject to few conditions.
Section 28(va) includes money received (in cash or kind) under an agreement for:
Not carrying out any activity in relation to any business, or
Not sharing any know-how, patent, copyright, trademark, license, franchise or any other business/ commercial right of similar nature/ information/ technique.
Let Tax2Win experts file your belated return & claim your TDS
Has your take home salary increased? Check the impact of Budget 2023 on your income
Check Now→