TDS Provisions on Commission under Income-tax Act, 1961
- Insurance Commission:- Under section 194D of Income-tax Act, 1961, any person responsible for paying to a resident, any income by way of remuneration or reward, commission or otherwise, for soliciting or procuring insurance business (including business relating to the continuance, renewal or revival of policies of insurance) shall deduct income-tax at the rate of 5% at the time of payment or at the time of credit of income to the account of the payee whichever is earlier.
Note:- Provided that there shall be no deduction under section 194D, if the aggregate amount of such income credited or paid during the financial year does not exceed Rs. 15000.
Note:- Mode of payment- Cash/Cheque/Draft or any other mode.
2. Commission on Sale of Lottery Tickets:- Under section 194G of Income-tax Act, 1961, any person responsible for paying to any person any income, by way of commission, remuneration or prize on lottery tickets, for stocking, distributing, purchasing or selling lottery tickets shall deduct income-tax at the rate of 5% at the time of payment or at the time of credit of income to the account of the payee whichever is earlier.
Note: Provided that there shall be no deduction under section 194G, if the amount of such income credited or paid does not exceed Rs. 15000.
Note:- Mode of payment- Cash/Cheque/Draft or any other mode.
Commission or Brokerage:-
Under section 194H of Income-tax Act, 1961, any person (other than an individual or HUF) who is responsible for paying to a resident, any income by way of commission (other than insurance commission of section 194D) or brokerage, shall deduct income-tax at the rate of 5% at the time of payment or at the time of credit of income to the account of the payee whichever is earlier.
Note:- Provided that there shall be no deduction under section 194H, if the aggregate amount of such income credited or paid during the financial year does not exceed Rs. 15000.
Note:- Provided further that an individual or HUF whose total sales, gross receipts or turnover from the business or profession exceed [Rs. 1 crore in case of business or Rs. 50 lakhs in case of profession] during the financial year immediately preceding the financial year in which such commission or brokerage is credited or paid, shall deduct income-tax at the rate of 5% at the time of payment or at the time of credit of income to the account of the payee whichever is earlier.
Note:- Provided that there shall be no deduction under section 194H, if any commission or brokerage payable by Bharat Sanchar Nigam Limited or Mahanagar Telephone Nigam Limited to their public call office franchisees.
- Commission or brokerage” includes any payment received or receivable, by a person acting on behalf of another person for services rendered (other than professional services).
- Professional services includes legal, medical, engineering or architectural or accountancy or technical consultancy or interior decoration or such other profession [notified for the purposes of section 44AA.
- Account includes Suspense account as well.
Note:- Mode of payment- Cash/Cheque/Draft or any other mode.