Section 194H - TDS on Commission (other than Insurance Commission) or Brokerage - Income Tax - Ready Reckoner - Income Tax

Section 194H : TDS ON COMMISSION (OTHER THAN INSURANCE COMMISSION) OR BROKERAGE Deductor - Any person [other than individual or HUF (not liable to tax audit in preceding Financial Year)] who is responsible for paying, any income by way of commission (not being insurance commission u/s 194D ) or brokerage shall deduct income tax thereon. Deductee - Any resident Time of Deduction - At the time of credit or payment of such income in cash or by the issue of a cheque or draft or by any other mode , whichever is earlier. Rate of TDS 2% [ Substituted vide Finance (No. 2) Act, 2024 w.e.f. 01.10.2024 ] 5%. [ Upto 30.09.2024 ] Note: No TDS where amount does not exceed 15,000 during a financial year. Commission to employees and employee directors will form part of salary income and is liable to TDS under section 192 of the Act and not under this section. Important Circular, Notification Instruction Tax should be deducted at source under section 194H on amount available to travel agents being difference between airfare fixed by Airlines and price at which agents are enabled to sell tickets. [ Letter F.No. 275/70/2009-IT(B) , dated 22-12-2009 ] No TDS is required to be deducted by BSNL or MTNL on commission or brokerage paid to their PCO franchisees. [ Instruction No. 03/2009 Dated 8-5-2009 ] No TDS u/s 194H on turnover commission payable by RBI to agency banks: The work of receipt of tax payments and issue of refunds is conducted by the Banks authorized for such purpose by RBI. As a compensation for the work so conducted, the Central Government pays to the banks, through RBI, commission termed as Turnover Commission . [ Circular no. 06/2003 dated 03.09.2003 ] Tax Deduction at Source (TDS) on payments by television channels and publishing houses to advertisement companies for procuring or canvassing for advertisements. [ Circular No. 05/2016 dated 29/02/2016 ] w.e.f. 01.04.2024, No deduction of tax shall be made under the provisions of section 194H, payment made by any payer to a person being a Unit of International Financial Services Centre (hereinafter referred to as payee ), in respect of following services If, IFSC is Banking Unit Referral fee Brokerage income Commission income on factoring and forfaiting services If IFSC unit is Finance Company or Finance Unit Commission income on factoring and forfaiting services If IFSC unit is Registered Distributor Distribution fee and Commission fee If IFSC unit is Custodian/ International Trade Finance Service or ITFS / FinTech Entity Commission fee This exemption is subject to the fulfillment of the conditions specified in Notification No. 28/2024 , dated March 7, 2024.