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TDS on Commission and Brokerage

Commission and brokerage attract TDS at 2% under Section 194H once the total for the year crosses ₹20,000. Insurance commission is covered separately by Section 194D. Individuals and HUFs who are not under tax audit deduct only under Section 194M, at 2% above ₹50 lakh a year.

Quick answer (FY 2025-26 and FY 2026-27)

TDS rate
2%
Threshold
₹20,000 in the year

TDS on commission: rate chart

Payment Section (1961 Act) New section (2025 Act) Rate Threshold
Commission or brokerage (other than insurance commission) 194H 393(1), Sl. No. 1(ii) 2% ₹20,000 a year
Insurance commission to an individual or HUF agent 194D 393(1) 2% ₹20,000 a year
Insurance commission to a company or other agent 194D 393(1) 10% ₹20,000 a year
Commission paid by an individual or HUF not under audit 194M 393(1) 2% ₹50 lakh a year

What changed in 2024 and 2025

The 194H rate came down from 5% to 2% on 1 October 2024, and the threshold went up from ₹15,000 to ₹20,000 on 1 April 2025. The 194D rate for individual agents fell from 5% to 2% and its threshold rose to ₹20,000, both from 1 April 2025.

From 1 April 2026 these provisions sit in the Section 393(1) table of the Income-tax Act, 2025, with the same rates and limits.

What counts as commission

Commission is any payment to a person acting on behalf of another for services (other than professional services) or for buying or selling goods. It includes commission retained by an agent out of sale proceeds, discounts given to distributors that are really commission, and brokerage on property deals. Brokerage on securities is excluded.

Where GST is charged separately on the commission invoice, TDS is deducted on the amount excluding GST.

TDS on commission calculator

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Frequently Asked Questions

What is the TDS rate on commission?
2% under Section 194H, applicable from 1 October 2024. Before that it was 5%.
What is the TDS limit on commission for FY 2026-27?
₹20,000 in the year. It was ₹15,000 until 31 March 2025.
What is the TDS on insurance commission?
2% for individual and HUF agents and 10% for companies, under 194D, above ₹20,000 a year.
Do individuals have to deduct TDS on commission?
Only if they are under tax audit (then 194H applies), or under 194M if the total of commission, contract and professional payments exceeds ₹50 lakh in the year.
Is TDS on commission deducted on GST?
No, if GST is shown separately; TDS is on the commission excluding GST.
What is the new section for 194H?
From 1 April 2026 it is Section 393(1), Table Sl. No. 1(ii) of the Income-tax Act, 2025.
What is the due date for depositing TDS on commission?
By the 7th of the following month. For tax deducted in March, the due date is 30 April. Tax deducted under 194-IB by individual tenants is paid with Form 26QC within 30 days from the end of the month of deduction.
What happens if TDS on commission is not deducted or deposited on time?
Interest is charged at 1% a month (or part of a month) from the date TDS was deductible until it is deducted, and 1.5% a month from deduction until deposit. Late filing fees, penalties and disallowance of the expense can also apply.
Which TDS return and certificate apply to TDS on commission?
Deductors with a TAN file a quarterly return in Form 26Q (Form 27Q for payments to non-residents) and issue Form 16A to the payee each quarter. Individual tenants under 194-IB use Form 26QC and issue Form 16C.
How can the payee check the TDS deducted?
In Form 26AS and the Annual Information Statement (AIS) on the income tax portal. The TDS is then claimed as a credit against tax in the income tax return, and any excess is refunded.
Did the Income-tax Act 2025 change TDS rates from April 2026?
No. From 1 April 2026 the new Act renumbered the provisions (TDS is mainly in Sections 392 and 393), but the rates and thresholds carried over. Returns and challans for payments from that date use the new section references.

New section references are to the Income-tax Act, 2025, in force from 1 April 2026. Verify the table serial number against the official text before quoting it in a return or notice reply.

Section-wise details

Section 194H
Commission & Brokerage

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