Section 194H – TDS on Commission and Brokerage

Tax Glossary Definition

Section 194H – TDS on Commission and Brokerage

Under this section, when a person pays commission or brokerage to another (other than an insurance commission) and the payment exceeds the prescribed limit, tax must be deducted at source. The payer is responsible for deducting TDS at the applicable rate before making the payment.

Example: If a company pays ₹50,000 as brokerage to an agent for finalizing a transaction, TDS should be deducted at 5%, amounting to ₹2,500.

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