TDS needs to be deducted on payment of insurance commission.
- Time of Deduction- TDS to be deducted at the time of payment or credit, whichever is earlier.
- Deductor- Any person who makes a payment in the form of remuneration or reward as part of the insurance business should deduct tax
- Deductee- The payment of interest should be made to a resident. If payment is made to a non-resident, TDS shall be deducted under section 195.
- Tax Rate- TDS at a flat rate of 5% (individuals) and 10% (domestic co) shall be applicable over the threshold of Rs.15,000 in one FY.
If PAN is not furnished, then tax to be deducted at a higher rate.
- Nature of Income: Remuneration/ rewards, by the way of commission or for the following purposes:
- Soliciting or obtaining insurance business
- Continuance, renewal or revival of policies of insurance
- Cases when TDS shall not be deducted- If Form 15G/15H submitted