Tax Deduction at Source

Section 194 - IC - Payment under Specified Agreement Referred to in

Section 45(5A)
• Threshold limit for deduction of tax at source - No threshold specified

• Payer - Any person responsible for paying any sum by way of consideration,

not being consideration in kind, under a registered agreement, wherein L or

B or both are handed over by the owner for development of real estate

project, for a consideration, being a share in L or B or both in such project,

with payment of part consideration in cash

• Payee – Any Resident

• Rate of TDS - 10%

• Time of deduction - At the time of credit or at the time of payment, whichever

is earlier

Section 194LA - Compensation on Acquisition of certain Immovable

Property Other than Agricultural Land

• Threshold limit for deduction of tax at source - > Rs. 2,50,000 in a financial

year in the nature of compensation or enhanced compensation on

compulsory acquisition of immovable property

• Payer - Any person responsible for paying any Sum

• Payee – Any Resident

• Rate of TDS – 10%

• Time of deduction - At the time of payment

Section 194J - Fees for Professional or Technical Services / Royalty / Non-

Compete Fees / Directors’ Remuneration

• Threshold limit for deduction of tax at source - > Rs. 30,000 in a Financial year,

for each Category of income. (However, this limit does Not apply in case of

payment made to director of a company)

• Payer - Any person, other than an individual or HUF

However, in case of fees for professional or technical services paid or

credited, Individual / HUF (covered u/s 44AB) is liable to deduct tax u/s 194J.

• Payee – Any Resident

• Rate of TDS -

2% -engaged in the business of call center

10% -Others

• Time of deduction - At the time of credit or at the time of payment - whichever

is earlier

• Exempt from TDS -

Any sum by way of fees for professional services credited or paid by an

individual or HUF exclusively for personal purposes of such individual or any

member of HUF.
Question 9
XYZ Ltd. makes a payment of Rs. 28,000 to Mr. Ganesh on 2.8.2019 towards fees for

professional services and another payment of Rs 25,000 to him on the same date

towards fees for technical services.

Discuss whether TDS provisions under section 194J are attracted purposes of such

individual or any member of HUF.

Solution
194J = 53,000 x 10%
= 5300/-

Prepared By: CA DEVICHARAN PRABHU