Sec 194H – Commission or brokerage
Any person who is responsible for paying to a resident, commission or brokerage is required to deduct TDS. If commission is payable in respect of insurance commission under section 194D then such commission is not covered under this section.
Individual and Hindu Undivided Family who were covered under area 44AB are additionally needed to deduct TDS. From FY 2020-21, individual and HUF whose turnover from business is above Rs 1 crore or gross receipts from calling are above Rs 50 lakh are likewise needed to deduct TDS.
Commission and Brokerage Of TDS
Commission or brokerage includes any payment, if it is
- Received or receivable.
- Directly or indirectly.
- By a person acting on behalf of another person.
Rate of TDS
The rate of TDS is 5%. The rate is 3.75% for exchanges from 14 May 2020 until 31 March 2021. No additional charge, educational cess or SHEC will be added to the above rates. Subsequently, the duty will be deducted at source at the Basic rate. The pace of TDS will be 20% in all cases in case PAN isn’t quoted by the deductee.
Under what conditions TDS u/s 194H isn’t deductible
No allowance will be made under this segment for a situation where the sum or the total measures of such pay to be credited or paid during the monetary year doesn’t exceed INR 15,000.
The Person can make an application to the assessing officer under section 197 for deduction of tax at NIL rate or at a lower rate.