The provisions relating to TDS on brokerage and commission have been restructured under the Income-tax Act, 2025. The earlier Section 194H of the Income-tax Act, 1961 is now covered under Section 393(1) [Table: Sl. No. 1(ii)], effective from 1st April, 2026.
While the core concept of tax deduction on insurance commission remains largely unchanged, the new Act brings a more structured presentation through table-based classification.
Quick Reference – Section Mapping & Reporting
- New Section (IT Act 2025): Section 393(1)
- Table Reference: Table: Sl. No. 1(ii)
- Nature of Payment: Other Brokerage or Commission
- Earlier Section (IT Act 1961): Section 194H
- Return Form: 26Q
- Code (for return filing): 1006
Applicability of TDS on Other Brokerage or Commission
Any person responsible for paying to a resident income by way of other brokerage or commission is required to deduct tax at source.
This includes payments received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered or for transactions relating to buying or selling of goods or assets.
It does not include insurance commission, which is covered under a separate provision.
Time of Deduction
TDS is required to be deducted at the earlier of the following:
- At the time of credit of such income to the account of the payee
- At the time of payment by cash, cheque, draft, or any other mode
Rate of TDS
The applicable TDS rate is as follows:
- 2% on other brokerage or commission payments
In cases where the deductee does not furnish PAN, tax shall be deducted at the higher of:
- The rate specified above, or
- 20% in case of unfurnished PAN as per applicable provisions
Threshold Limit
No TDS is required to be deducted if the aggregate amount of other brokerage or commission credited or paid during the financial year does not exceed ₹20000
Nature of Payments Covered
The following types of payments are covered under this provision:
- Payments for services rendered (excluding professional services)
- Payments for services in the course of buying or selling goods
- Transactions relating to assets, valuable articles, or things (excluding securities)
- Amounts received or receivable on behalf of another person
Exemptions
TDS under this section is not required to be deducted in the following cases:
- Other brokerage or commission does not exceed ₹20,000 during the financial year
- Commission paid by an employer to an employee (covered under salary provisions)
- Insurance commission covered under a separate provision
- Cases where the payee holds a NIL or lower deduction certificate
- Payments made by TV channels or newspapers to advertising agencies
- Brokerage or commission related to securities transactions
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