When is TDS under Section 194J deducted at 10% and when at 2%?
Category
Rates & sections
Answered by
A CA firm
Bottom line
Professional fees attract 10%, while fees for technical services (and call-centre/royalty for film sale) attract 2% — above a ₹50,000 annual threshold per category.Section 194J carries two rates. Professional fees (legal, medical, engineering, architectural, accountancy, technical consultancy, etc.) attract 10%. Fees for technical services, payments to call centres, and royalty for sale/exhibition of cinematographic films attract 2%.
The classic trap is software and IT support: routine technical/maintenance work is usually 2%, while genuinely professional advice is 10%. The threshold is ₹50,000 in the financial year (raised by Budget 2025). No valid PAN means 20%.
General information for FY 2026-27 under the Income-tax Act 2025, not advice on your specific case. Verify against the latest law or ask a CA before acting.