Section 194H - Commission or brokerage - Income-tax Act, 1961

1 [Commission or brokerage. 194H. Any person, not being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of June, 2001, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or brokerage, shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of 9 [ two per cent ] : Provided that no deduction shall be made under this section in a case where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year to the account of, or to, the payee, does not exceed 7 [ fifteen thousand rupees ] : 3 [ Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed 8 [ one crore rupees in case of business or fifty lakh rupees in case of profession ] during the financial year immediately preceding the financial year in which such commission or brokerage is credited or paid, shall be liable to deduct income-tax under this section:] 4 [Provided also that no deduction shall be made under this section on any commission or brokerage payable by Bharat Sanchar Nigam Limited or Mahanagar Telephone Nigam Limited to their public call office franchisees. ] Explanation .-For the purposes of this section,- ( i ) commission or brokerage includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities; ( ii ) the expression professional services means services rendered by a person in the course of carrying on a legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or such other profession as is notified by the Board for the purposes of section 44AA; ( iii ) the expression securities shall have the meaning assigned to it in clause ( h ) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); ( iv ) where any income is credited to any account, whether called Suspense account or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.] ----------------------- Notes ;- 1. Reintroduced by the Finance Act, 2001, w.e.f. 1-6-2001. Earlier section 194H was omitted by the Finance Act, 1999, w.e.f. 1-4-2000. Prior to its omission, section 194H, was inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991 and later on amended by the Finance Act, 1992, w.e.f. 1-6-1992. 2. Substituted for five by the Finance Act, 2007, w.e.f. 1-6-2007. Earlier five was substituted for ten by the Finance Act, 2002, w.e.f. 1-6-2002. 3. Inserted by the Finance Act, 2002, w.e.f. 1-6-2002. 4. Inserted by the Finance Act, 2007, w.e.f. 1-6-2007. 5. In the first proviso, for the words two thousand five hundred rupees , the words five thousand rupees has been substituted vide Finance Act, 2010 with effect from the 1st day of July, 2010. 6. Substituted vide THE FINANCE ACT, 2016 w.e.f. 1st day of June, 2016 before it was read as, 2 [ ten ] per cent . 7. Substituted vide THE FINANCE ACT, 2016 w.e.f. 1st day of June, 2016 before it was read as, 5 [five thousand rupees] 8. Substituted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2020 before it was read as the monetary limits specified under clause ( a ) or clause ( b ) of section 44AB 9. Substituted vide Section 57 of the Finance (No. 2) Act, 2024 dated 16-08-2024 w.e.f. 01-10-2024 before it was read as, 6 [ five per cent. ]