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194H

Section 194H TDS Rate FY 2026-27

TDS on commission or brokerage: rate, threshold, who deducts, and the new section number under the Income-tax Act 2025.

Quick answer

TDS rate
2%
Threshold
₹20,000 in aggregate during the year
Old section (1961 Act)
Section 194H
New section (2025 Act, from 1 Apr 2026)
Section 393(1), Table Sl. No. 1(ii)
Without PAN
20% if the payee does not furnish a valid PAN.

What changed: The rate was 5% until 30 September 2024 and is 2% from 1 October 2024. The threshold was ₹15,000 until 31 March 2025 and is ₹20,000 from 1 April 2025.

194H TDS rate chart

Nature of payment Rate
Commission or brokerage (other than insurance commission) 2%

Who deducts and when

Who has to deduct

Any person other than an individual or HUF, plus individuals and HUFs whose accounts were required to be audited in the preceding year.

When to deduct

At the time of credit or payment, whichever is earlier.

Points to remember

  • Covers payments to a person acting on behalf of another for services (other than professional services) or for buying or selling goods, or dealing in valuables or assets other than securities.
  • Insurance commission is covered by a separate provision (old Section 194D), not 194H.
  • Commission retained by an agent (for example, from sale proceeds) is treated as credited or paid, so TDS still applies.

Worked example

A distributor pays a sales agent ₹60,000 commission in the year.

TDS at 2% = ₹1,200.

Section 194H TDS calculator

Runs in your browser. Check the threshold above before deducting.

Applicable rate –
TDS amount ₹0
Net amount payable ₹0

Frequently Asked Questions

What is the TDS rate under Section 194H?
2% for commission or brokerage (other than insurance commission).
What is the threshold limit for TDS under 194H?
₹20,000 in aggregate during the year. The rate was 5% until 30 September 2024 and is 2% from 1 October 2024. The threshold was ₹15,000 until 31 March 2025 and is ₹20,000 from 1 April 2025.
What is the new section for 194H under the Income-tax Act 2025?
From 1 April 2026 the Income-tax Act 2025 replaces the 1961 Act. TDS on commission or brokerage (old Section 194H) is now covered by Section 393(1), Table Sl. No. 1(ii). The rate and threshold carried over unchanged.
Who has to deduct TDS under 194H?
Any person other than an individual or HUF, plus individuals and HUFs whose accounts were required to be audited in the preceding year.
When should TDS under 194H be deducted?
At the time of credit or payment, whichever is earlier.
What is the TDS rate under 194H if PAN is not available?
20% if the payee does not furnish a valid PAN.
What is the due date for depositing TDS under 194H?
Generally by the 7th of the following month. For tax deducted in March, the due date is 30 April. Government deductors paying without a challan must deposit on the same day.
What happens if TDS under 194H is not deducted or deposited on time?
Interest is charged at 1% per month (or part of a month) from the date tax was deductible to the date it is deducted, and at 1.5% per month from deduction to deposit. Late filing fees and penalties can also apply, and for a business, 30% of the expense may be disallowed.
What is the current TDS rate under 194H?
2%, applicable from 1 October 2024. Before that the rate was 5%.
Is TDS deducted under 194H on insurance commission?
No. Insurance commission is dealt with under a separate provision (old Section 194D).

Section 393 table references are based on the Income-tax Act, 2025 as published. Verify the serial number against the official text before quoting it in a return or notice reply.

Other TDS sections

194C
Contractor Payments
194J
Professional & Technical Fees
194I
Rent

TDS on common payments

TDS on Rent
10% / 2%
TDS on Salary
Slab rates (average)
TDS on Purchase of Goods
0.1%
TDS on Property Purchase
1%
TDS on Sale of Property
1% (resident) / 12.5%+ (NRI)
TDS on Commission
2%
TDS on Professional Fees
10% / 2%
TDS on Contractor Payments
1% / 2%
TDS on Partners' Remuneration
10%
TDS on FD Interest
10%
TDS on GST (TDS under GST)
2% (1% CGST + 1% SGST, or 2% IGST)
TDS on Cash Withdrawal
2% (5% for non-filers above ₹1 crore)
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