Explain TDS sec 194j and its limit?

Question

Accepted Answer

TDS sec 194j is a section of the Income Tax Act that deals with TDS on fees for professional or technical services.

TDS sec 194j requires deduction of tax at source at the rate of 10% on fees for professional or technical services.
The limit for TDS under sec 194j is Rs. 30,000 for a single payment or Rs. 1,00,000 in aggregate during the financial year.
If the payment is made to an individual or HUF, the TDS rate is 10%. If the payment is made to any other entity, the TDS rate is 2%.
For example, if a company pays Rs. 40,000 as professional fees to an individual in a financial year, TDS of Rs. 4,000 (10% of Rs. 40,000) will be deducted.
Another example is if a company pays Rs. 1,50,000 as professional fees to a non-individual entity in a financial year, TDS of Rs. 3,000 (2% of Rs. 1,50,000) will be deducted.

Accepted Answer

194j is for professional services and its annual limit is 30000

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