What is the tax deducted at source (TDS) rate on professional fees?

As per Section 194J of the Income Tax Act, any person making payment of professional fees to a resident is required to deduct tax at source at the rate of 10% if the total fees during the financial year exceed Rs. 30,000. The CBDT has issued Circular No. 715 dated August 8, 2024 clarifying the scope of ‘professional services’ for TDS purposes. Note: Finance Act 2025 has not amended Section 194J. Supporting Case Law: Kalyan Sundaram v. DCIT (2019) – Madras High Court – (2019) 417 ITR 612 – Held that fees paid to lawyers clearly fall under ‘professional services’ for TDS under Section 194J. Current Status: The TDS provisions related to professional fees are largely settled and not under litigation.