Answer

1. F

   Facts

   If you pay fees to a doctor, lawyer, CA, consultant, IT developer, or any professional above ₹30,000 in a year, you must deduct 10% TDS before paying them. Most small businesses and startups pay freelancers without TDS. The professional loses nothing (gets TDS credit). But the payer becomes an assessee in default with interest and penalty equal to TDS.

2. P

   Provisions and law

   • Sec 393 (old 194J(1))
   • Sec 398 (old 201)
3. A

   Analysis

   Sec 393, Income-tax Act 2025 (old Sec 194J) rate clarification, 2% vs 10%: From April 1, 2020: professional services (doctor, lawyer, CA, architect, technical consultant) = 10%. Technical services (IT maintenance, call centre, software support, data analytics) = 2%. This split matters: a company paying an IT developer for software maintenance (technical services) deducts 2%, not 10%. But same company paying IT consultant for strategic advice (professional services) = 10%. The distinction is blurred in practice, when in doubt, use 10%. When Sec 393 (old Sec 194J) applies to startups and small companies: A Pvt Ltd company (even with ₹50L revenue) must deduct TDS under Sec 393 (old Sec 194J) if they pay professional fees. The audit threshold exemption is for individuals/HUF only. Any company = must deduct Sec 393 (old Sec 194J). Many startups miss this, they pay CA, lawyers, freelance developers and don't deduct TDS. Common audit exposure.

4. C

   Conclusion

   1. 1Identify: does your entity (company/audit-applicable proprietor) pay any professional fees?
   2. 2Check if cumulative professional fees to any one person cross ₹30,000 in the year
   3. 3Determine rate: 10% (professional services, lawyer, doctor, CA, architect) or 2% (technical services, IT maintenance, call centre)
   4. 4Collect recipient's PAN before payment, without PAN: deduct at 20%
   5. 5Get TAN (Tax Deduction Account Number) if not already registered, mandatory for TDS deposition
   6. 6Deduct TDS at time of payment. Net payment to professional = fee − TDS

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.