Any individual or a HUF, whose turnover/gross sales/total receipts more than Rs. 1 Crore in case of business or Rs. 25 lacs in the case of profession, in the preceding year, shall also be liable to deduct tax at source under section 194J on payment of fees for professional or technical services.
The limit was Rs. 60 Laks for A.Y.2012-13 in case of business. The limit was Rs. 15 Laks for A.Y.2012-13 in the case of profession.
Meaning Of Professional Services
Professional services means services provided by professional persons like by advocates, chartered accountants, engineers or architect.
Technical services means, the services which is in nature of technical, managerial and consultancy.
TDS Rates on fees for Technical or Professional Services
The rate of TDS is @10% for A.Y. 2013-14. No surcharge, education cess and secondary and Higher education cess will be levied on TDS during F.Y. 2012-13.
Note: TDS will be deducted @20% if PAN is not provided by deductee to the deductor (Sec.206AA) w.e.f. 1-4-2012.
No deduction in the case of
- An individual or HUF is not required to deduct TDS on payment of royalty or sums, irrespective of his turnover/gross sales/total receipts.
- The payee does not need to deduct TDS if payment exclusively for personal purpose.
- No need to deduct TDS if payment made to
- Central Government
- Any corporation by central or state government
- A mutual fund notified
When Liability to Deduct TDS arises
- First condition the payee should be resident.
- Total payment paid or credited during a financial year to the same person, by way of fees for professional services, or fees for technical services, or royalty or sum does not exceed Rs.30,000 in each case.
Deductor will deposit TDS with in time limit as prescribed by Income Tax Act. You can get more information about time limitation to deposit TDS here.
But online payment to deposit of TDS is mandatory for those whose accounts audited u/s 44AB and for companies. Please read our article how to deposit tax online easily and securely.
TDS Returns for Profession & Technical Services
The another duty of the deductor is to submit TDS return/TDS statement within the prescribed limit as given below.
|Quarter||Govt. Offices||Other Deductee|
|1st QTR. ending on 30th June||31st July||15th July|
|2nd QTR. ending on 30th Sept.||31st Oct.||15th Oct.|
|3rd QTR. ending on 31st Dec.||31st Jan||15th Jan|
|4th QTR. ending on 31st March||15th May||15th May|
Issue of TDS Certificate
The deductor will issue TDS certificate within the prescribed limit as specified in Income Tax Act.
The other provisions like online deposit of TDS, Issue of TDS certificate, Quarterly Returns of TDS and penalty on failure to deposit TDS or statements are common for TDS deduction on “fees for technical or professional services, royalty and certain other sums” like other nature of payments to deduct TDS.