Section 194D- TDS on Insurance Commission

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TDS needs to be deducted on payment of insurance commission.

  1. Time of Deduction- TDS to be deducted at the time of payment or credit, whichever is earlier.
  2. Deductor- Any person who makes a payment in the form of remuneration or reward as part of the insurance business should deduct tax
  3. 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.
  4. 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.

  1. 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
  2. Cases when TDS shall not be deducted- If Form 15G/15H submitted
∼Authored by – CA Anushka Saraogi

Section 194A- TDS on Interest (Other than Interest on Securities)

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