Notice Board

Deduction of TDS only at 2% (of Basic Value) effective 1st April 2020 as per Finance Act 2020 (under sec 194J - Technical service or 194C- Contractual service)

Dear Clients,

The following information is for your urgent attention and necessary actions related to the payments against our services.

Applicable to all TECHNO DEVELOPERS GROUP (i.e. TechnoDG) Invoices pertaining to technical support & services raised towards services arrangement with your esteemed organization(s).

With reference to the above, we wish to bring to your kind attention, Section 194J of the Income Tax Act, 1961 has been amended by Section 97 of the Finance Act, 2020 by providing for TDS @ 2% in cases of fees for technical services (except professional services). This amendment is effective from 1st April, 2020 and is applicable for any deduction of tax on and from 1st April, 2020.

The amended Section 194J reads as under:

“Fees for professional or technical services."

1. 194J. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of:
2. (a) fees for professional services, or
3. (b) fees for technical services, or
4. b(a) any remuneration or fees or commission by whatever name called, other than those on which tax is deductible under section 192, to a director of a company, or
5. (c) royalty, or
6. (d) any sum referred to in clause (va) of section 28

As the services provided by TechnoDG falls under category of Technical Support, you are requested to Deduct 2% TDS only and not higher as already explained in the following notifications.

Kindly check the following reference links for better guidance:

• https://incometaxindia.gov.in/pages/acts/income-tax-act.aspx
• https://cleartax.in/s/section-194j

For any further clarification or assistance please feel free to get in touch with us.