Answer: TDS on payment of Commission or Brokerage Section 194H
Every person making payment of any commission or brokerage to a resident shall, deduct income-tax at the rate of 5%, provided amount paid or payable during a particular year to a particular person is exceeding Rs.15000
An Individual or Hindu Undivided Family shall be required to deduct tax at source only if the turnover of business or profession has exceeded the limit mentioned under section 44AB during the financial year immediately preceding the relevant year.
Example:- Inder trading limited rendered services in relation to sale of mustard oil to Sunil oils limited and commission charged is Rs.7,00,000, in this case, tax to be deducted at source by Sunil oils limited shall be 7,00,000 x 5% = Rs. 35,000 and amount payable to Inder trading limited shall be
Commission 7,00,000
Less: TDS(7,00,000 x 5%) (35,000)
Amount Payable 6,65,000