Union Budget 2025-26 (Full) + Finance Bill, 2025

Section 194J - Fees for professional or technical services.

Section 194J of the Act requires for deduction of tax at source on payment by any person, not being an individual or a Hindu undivided family, who pays to a resident any sum of the nature of fees for professional or technical services, 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 royalty, or any sum referred to in clause (va) of section 28 of the Act, at the rates specified therein.

2. Clause (B) of proviso to sub-section (1) of section 194J provides the threshold amount of sum paid during the financial year for tax to be deducted under this section. It is proposed to increase the thresholds specified in Clause (B) of proviso to sub-section (1) of section 194J of the Act as below –

S. No	Nature of sum	Current threshold to deduct TDS	Proposed threshold
1.	Fees for professional services	Rs. 30,000/-	Rs. 50,000/-
2.	Fees for technical services	Rs. 30,000/-	Rs. 50,000/-
3.	Royalty	Rs. 30,000/-	Rs. 50,000/-
4.	Any sum referred to in clause (va) of section 28	Rs. 30,000/-	Rs. 50,000/-

3. This amendment will take effect from the 1st day of April 2025.

[Clause 60]

 

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Full Text:

Union Budget 2025-26 (Full) + Finance Bill, 2025

TDS on professional and technical fees: higher thresholds reduce mandatory withholding obligations from the next financial year. The Finance Bill increases the threshold for tax deduction at source on payments characterised as fees for professional services, fees for technical services, royalty and other specified sums made by persons other than individuals or HUFs; deductions are required only when aggregate payments in a financial year exceed the revised thresholds, with the amendment effective from the start of the specified financial year.