Section 194D - TDS on Insurance Commission - Income Tax - Ready Reckoner - Income Tax

Section 194D : TDS ON INSURANCE COMMISSION Any person responsible for paying to a resident any income by way of remuneration or reward, whether by way of commission or otherwise- for soliciting or procuring insurance business or for continuance, renewal or revival of policies of insurance shall at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier. Rate of TDS Payee whose name will suffer TDS Rate of TDS When recipient is Resident person other than Company 5% When Recipient is a Domestic Company 10% Note: No TDS where amount does not exceed 15,000 during a Financial Year( ₹ 20,000/- before June 1, 2016). Reinsurance not covered by section 194D - Reinsurance differs from insurance in number of ways and the most important is that there is no contractual relationship between the direct insured and reinsurer. There are separate contract involved - one between the direct insurer and another between the insurer and the reinsurer. Insurer has to pay all valid claims to insured, irrespective of whether the insurer can recover the same from his reinsurer. If the recipient does not furnish his PAN to the deductor, tax will be deducted at the rate of 20%. PAN of the deductee should be mentioned in any correspondence and document which is exchange between the deductor and deductee. No deduction of tax shall be made under the provisions of section 194D, payment made by any payer to a person being a Unit of International Financial Services Centre in respect of following services IFSC Insurance Intermediary office Insurance Commission [ Circular No. 28/2024 dated 07.03.2024 ]