Section 194J Fees for professional or technical services
The amendment to section 194J by the Finance Act, 2012 requires deduction of tax at source @ 10% on any remuneration or fees or commission, by whatever name called, to a director of a company, other than those on which tax is deductible under section 192.
However, the independent limit of Rs.30,000 each provided for under section 194J in respect of other payments covered therein, namely, royalty, fee for technical services, fee for professional services and non-compete fees, as a threshold, beyond which TDS @ 10% would be attracted, is not being provided in respect of director’s remuneration.
This unintended inequity may be removed
It is suggested that section 194J be amended to provide an independent limit of Rs.30,000, above which remuneration or fees or commission to director may be subject to tax deduction at source.
(SUGGESTIONS FOR RATIONALIZATION OF THE PROVISIONS OF DIRECT TAX LAWS)
Enhancement of Limits for TDS on professionals – Section 194J
TDS threshold limits u/s 194J were last revised in 2010. The deduction of tax at source on such small amounts involves deployment of relatively large amount of resources in terms of manpower, systems and other costs at the assessee’s end without any significant benefits to the revenue.
It is suggested that the TDS limit for payment of professional or technical fees under section 194J may be increased from Rs. 30000 to Rs. 100000.