The Statutory Brief

IT Act 1961 → 2025 / Section 194J

TDS

Section 194J → Section 393

TDS on fees for professional or technical services, royalty and director's fees

Section 194J of the old Income-tax Act, 1961 · new section 393 under the Income-tax Act, 2025

New reference Section 393(1), Table Sl. No. 6(iii); exclusion in 393(4), Sl. No. 9

Income-tax Act, 1961Section 194J

  • 194J(a): 2% on fees for technical services, call centres, film royalty
  • 194J(b): 10% on professional fees, other royalty, non-salary director remuneration
  • Threshold ₹50,000 per category (raised from ₹30,000 from 1 April 2025); no threshold for director fees

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 393(1), Table Sl. No. 6(iii); exclusion in 393(4), Sl. No. 9

  • Technical services: Table Sl. No. 6(iii).D(a), 2%
  • Professional services and director fees: Sl. No. 6(iii).D(b), 10%
  • Return codes: 1026 (technical), 1027 (professional), 1028 (director)
  • Individuals/HUFs not otherwise liable to deduct: Sl. No. 6(ii) (old 194M), 2%
  • No TDS where an individual/HUF pays exclusively for personal purposes: section 393(4), Table Sl. No. 9

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Consolidated into section 393 with the technical/professional split kept as separate table entries. Rates and thresholds unchanged.

Practice notes

  • Old 194M (payments by individuals/HUFs to contractors and professionals) also sits in section 393(1), Table Sl. No. 6(ii).
  • Check the classification carefully: manpower supply is now expressly 'work' (contractor), not a technical service.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the TDS rate on professional fees under the new Income Tax Act 2025?

10% on fees for professional services and director's fees, and 2% on fees for technical services, under section 393(1), Table Sl. No. 6(iii), once payments exceed ₹50,000 in the year (no threshold for director's fees).

What is section 194J called in the new Income-tax Act, 2025?

Section 194J of the Income-tax Act, 1961 corresponds to Section 393(1), Table Sl. No. 6(iii); exclusion in 393(4), Sl. No. 9 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 194J under the new Income Tax Act?

Consolidated into section 393 with the technical/professional split kept as separate table entries. Rates and thresholds unchanged.

Is section 194J still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 194J of the 1961 Act. Section 393(1), Table Sl. No. 6(iii); exclusion in 393(4), Sl. No. 9 of the 2025 Act applies from tax year 2026-27.

Related sections

194C→393TDS on payments to contractors and sub-contractors194A→393TDS on interest other than interest on securities (FD, RD, loans)