Fact-check notes
Last fact-checked: 2026-06-04
AY 2026-27 return filing for FY 2025-26 is governed by the Income-tax Act, 1961. The Income-tax Act, 2025 applies from Tax Year 2026-27 onward, so new-section references must be checked against the live portal before filing.
This page is preparation guidance for scoping work on WorkIndex. Ask the expert to verify active law, portal forms, notifications and your documents before filing or signing anything.
What this covers
TDS on Commission 194H helps deductors and taxpayers understand what to verify before payment, return filing or correction.
- Section 194H covers commission and brokerage payments subject to threshold and deductor rules.
- Sales incentives, referral fees, marketplace commission and agency payouts need contract review.
- GST invoices and TDS base should be reconciled.
- Do not treat every discount as commission without facts.
Who this is for
- Business deducting TDS.
- Taxpayer reconciling Form 26AS/AIS.
- Finance team preparing quarterly return.
- Person receiving notice or default.
Documents and details to prepare
- PAN/TAN and deductor profile.
- Agreement, invoice and payment dates.
- Challan, return and certificate status.
- Lower/nil certificate or exemption proof if any.
Common mistakes to avoid
- Wrong section or assessment year.
- Deducting after payment deadline.
- Invalid PAN or certificate data.
- No reconciliation before filing return.
How to brief the expert
- Mention the city, entity type, transaction value, deadline and current portal status.
- Upload or list the records available so the expert can quote accurately.
- Ask for scope, deliverables, timeline, assumptions and government fee exclusions in writing.
- Keep acknowledgements, challans, filings, certificates and advice notes after completion.
FAQs
Can WorkIndex help with this?
Yes. Post your requirement and compare relevant experts by scope, quote, timeline and supporting documents needed.
Is this page legal or tax advice?
No. It is a preparation guide. Your expert should verify current law, portal forms, notifications and your documents before filing or signing.
What should I include in my post?
Include the city, year or period, entity type, deadline, notices if any, documents available and whether you need filing, review, drafting or ongoing support.
Frequently Asked Questions
1. What are the TDS rates, sections, and thresholds applicable to commission or brokerage on TDS on Commission 194H?
Under Section 194H, TDS is deducted at 5% on payments for commission or brokerage related to TDS on Commission 194H if the aggregate annual payment exceeds the threshold limit of ₹15,000.
2. What is the penalty for default or delay in TDS compliance for TDS on Commission 194H?
Failure to deduct or deposit TDS on TDS on Commission 194H on time attracts interest at 1% or 1.5% per month, late filing fees of ₹200 per day under Section 234E, and disallowance of expenses.
3. What is the threshold limit for TDS under Section 194H?
TDS is required to be deducted u/s 194H only if the aggregate amount of commission or brokerage paid or payable during the financial year exceeds ₹15,000. No TDS applies if the total amount is ₹15,000 or less.
4. What is the definition of commission or brokerage for tax purposes?
Commission or brokerage includes any payment received by a person acting on behalf of another person for services rendered (except professional services), or in the course of buying/selling goods, or in relation to any transaction relating to assets, valuable articles, or securities.
5. Does Section 194H apply to insurance commission?
No. Insurance commission is governed by a separate section, Section 194D (TDS rate is 5% for residents), and is subject to its own thresholds (₹15,000).
6. Does Section 194H apply to payments made by individuals?
Section 194H applies to individuals and HUFs only if they are liable to tax audit under Section 44AB (turnover > ₹1 crore for business or gross receipts > ₹50 lakh for profession) in the preceding financial year.
7. Is TDS applicable on bank commission or underwriting fees?
No. Under CBDT Circular No. 5/2012, no TDS is applicable on payments made to banks towards bank guarantee commission, underwriting fees, credit card commission, or warehousing charges.
8. What is the due date for depositing TDS deducted u/s 194H?
TDS must be deposited into the government treasury by the 7th of the following month (e.g., September TDS by October 7). For March deductions, the due date is April 30.
9. What form is used to file quarterly TDS returns for Section 194H?
All non-salary TDS deductions, including Section 194H, must be reported quarterly in Form 26Q on or before the due date (July 31, October 31, January 31, and May 31).
10. What is the penalty for late filing of TDS returns?
Under Section 234E, a late fee of ₹200 per day is charged for delayed filing of TDS returns, up to a maximum amount equal to the TDS amount in the return.
11. Can a payee obtain a lower TDS deduction certificate under Section 197?
Yes. If the payee's total income justifies a lower tax rate, they can apply in Form 13 online on the e-filing portal to obtain a lower or nil TDS certificate from their Assessing Officer u/s 197.
12. How does the agent verify TDS credits?
All TDS deductions u/s 194H appear in the taxpayer's Form 26AS and AIS under the deductor's TAN. The agent can verify these credits before filing their ITR.
13. Is TDS applicable on brokerage paid on the purchase of securities?
No. Under the explanation to Section 194H, no TDS is applicable on brokerage or commission paid in relation to transactions in securities on a recognized stock exchange.
14. What is the interest rate for delayed TDS payment?
If TDS is deducted but not deposited within the due date, interest at 1.5% per month is payable from the date of deduction to the date of deposit.
15. Does Section 194H apply to payments made to non-residents?
No. Section 194H applies only to payments made to resident taxpayers. Payments to non-residents or NRIs are governed by Section 195, where TDS rates depend on the DTAA or Income Tax Act provisions.