TDS on Professional Fees from 1 April 2026: Section 393 Guide
Professional-fee TDS continues from 1 April 2026 under Section 393 of the Income-tax Act, 2025. Understand the ₹50,000 threshold, rate distinction and transition from Section 194J.
From 1 April 2026, the familiar Section 194J reference is no longer the section used for new-law transactions. TDS on professional and specified service payments is reported through the relevant table entry of Section 393 of the Income-tax Act, 2025.
What is the basic threshold?
For the common professional and technical-service categories, the monetary threshold is ₹50,000, subject to the precise statutory category and payer conditions.
The threshold should be monitored on a year-to-date basis. It is not good practice to test only the amount of an individual invoice.
Professional service vs technical service
This distinction matters because the common rates can differ:
- Professional services: generally 10%.
- Technical services and specified lower-rate categories: generally 2%.
A ledger called “Consultancy Charges” does not decide the TDS rate by itself. The accountant should understand the actual service and the statutory category.
Which Act applies around March and April 2026?
TDS follows the law applicable when the earlier of credit or payment occurs.
If professional fees are credited on 31 March 2026 and paid in April, the old Act continues to govern that TDS event. If the first credit/payment occurs on or after 1 April 2026, the new Section 393 framework applies.
Year-end provision entries matter
A common error occurs when the expense is provided in March but TDS is considered only when the vendor invoice is paid later.
Where the law triggers deduction on the earlier of credit or payment, a provision or journal credit can itself create the deduction obligation if the payee is identifiable and the amount has been credited in the relevant manner.
Practical checklist
- Review professional and consultancy ledgers monthly.
- Identify the real nature of service.
- Check vendor-wise cumulative payments.
- Separate professional and technical-service rates correctly.
- Review year-end provisions before closing March.
- Use the correct new Section 393 table reference for Tax Year 2026-27.
The biggest TDS risk on professional fees is usually not arithmetic. It is wrong classification or missing the credit date.