What are professional fees?

What are professional fees?

Professional fees are prices charged by individuals specially trained in specific fields of arts and sciences, such as doctors, architects, lawyers, and accountants. “Professional Fees” is usually an income account used by a professional firm in recording its revenues. Definition of professional fees.

How do you charge professional fees?

To calculate an hourly rate, divide the cost of the project by the number of hours you will need to complete it. To do this, multiply the number of days you will take by 8, which are the approximate hours you are going to work per day.

Can you write off consulting fees?

Legal and professional services: You can deduct fees that you pay to attorneys, accountants, consultants, and other professionals if the fees are paid for work related to your consulting business. Self-employed people are also allowed to deduct 100% of their health insurance premiums from their income taxes.

What is fees for technical services?

Fees for Technical Services (FTS) have been defined in Section 9 itself under clause (vii) as any consideration (including lump sum) for rendering of any managerial, technical or professional services including the services of technical or other personnel.

What is the limit for TDS deduction?

Section 192- TDS on Salaries: TDS on salaries is deducted at the rate of the income tax slab for the relevant year. For the assessment year 2020-2021 the exemption limit for an individual is Rs 2,50,000.

What is the limit for 194J?

As per Section 194J, each item or independent payment has a threshold maximum limit of INR 30,000. TDS under this section also applies for the fees or remuneration paid to the company’s director even if the payment is not part of the main salary. In such cases, the INR 30,000 limit does not apply here.

What is 194J A and B?

Section 194J of the Act provides that any person, not being an individual or a HUF, who is responsible for paying to a resident any sum by way of fees for professional services, or fees for technical services, or any remuneration or fees or commission by whatever name called (other than those on which tax is deductible …

How can calculate TDS?

The employer deducts TDS on salary at the employee’s ‘average rate’ of income tax. It will be computed as follows: Average Income tax rate = Income tax payable (calculated through slab rates) divided by employee’s estimated income for the financial year.

Who is liable to deduct TDS?

When should TDS be deducted and by whom? Any person making specified payments mentioned under the Income Tax Act are required to deduct TDS at the time of making such specified payment. But no TDS has to deducted if the person making the payment is an individual or HUF whose books are not required to be audited.

What is TDS example?

Tax Deducted at Source (TDS) is a system introduced by Income Tax Department, where the person responsible for making specified payments such as salary, commission, professional fees, interest, rent, etc. is liable to deduct a certain percentage of tax before making payment in full to the receiver of the payment.

What is new TDS rate?

Synopsis

Nature of payment	Section of the Income-tax Act	TDS rate effective from April 1, 2021
Commission or brokerage received except for Insurance Commission	Section 194H	5%
Payment made while purchasing land or property	Section 194IA	1%
Payment of rent by individual or HUF exceeding Rs. 50,000 per month	Section 194IB	5%

What is the TDS rate on salary?

TDS Rate Chart

Annual Income	Tax Rates
Up to Rs.5,00,000	Nil
Rs.5,00,001-Rs./td>	20% of income above Rs 5 lakhs
Above Rs.Rs.1,12,500	Rs.1,00,000 + 30% of income above Rs 10 lakhs

What is the salary limit for Form 16?

Rs. 2,50,000

How is tax calculated on salary?

How to calculate income tax? (See example)

Up to Rs 2,50,000	Exempt from tax
Rs to Rs /td>	25% (25% of Rs less Rs
More than Rs Rs /td>	30% (30% of Rs less Rs
Cess	4% of total tax (4% of Rs 12,500 + Rs 25,500+ Rs 37,500 + Rs 50,000 + Rs 62,500 + Rs 1,77,600)