TDS Rate Chart Section 194H — TDS on Commission and Brokerage
Section 194H — TDS on Commission and Brokerage
Income Tax Act 1961 — s.194H · ITA 2025 — s.393 + 402
Rate and threshold
| Condition | Rate |
|---|---|
| All qualifying commission/brokerage | 2% |
- Threshold
- ₹20,000 aggregate in the FY
- Timing of deduction
- At credit or payment, whichever is earlier. Deposit by the 7th of the following month (30 Apr for March).
- Who deducts
- Any person other than individual/HUF; individuals/HUF if turnover exceeded ₹1 crore (₹50 lakh profession) in the preceding FY
- Payee
- Resident
Rate history
| Period | Value | Amended by |
|---|---|---|
| Until 30 Sep 2024 | 5% | — |
| From 1 Oct 2024 | 2% | Finance (No. 2) Act 2024 |
Threshold history
| Period | Value | Amended by |
|---|---|---|
| Until 31 Mar 2025 | ₹15,000 | — |
| From 1 Apr 2025 | ₹20,000 | Finance Act 2025 |
What this section covers
Commission or brokerage for services rendered (not being professional services), including sales agency — excludes insurance commission (s.194D) and securities transactions
Worked example
Distributor commission ₹5,000/month for 12 months
Annual ₹60,000 > ₹20,000 → TDS 2% = ₹1,200 for the year, deducted as each credit is made once the threshold is crossed.
Trade discount to a principal-to-principal distributor is NOT commission — the principal-agent test decides (Bharti Airtel, SC 2024).
Under the Income Tax Act 2025
From 1 April 2026, s.194H of the 1961 Act maps to s.393 + 402 of the Income Tax Act 2025 (split mapping, per the official CBDT concordance). Consolidated into the s.393 TDS table under the ITA 2025.
Full 1961 → 2025 mapping for s.194H →Frequently asked questions
Is a trade discount to a distributor commission?
Only if the relationship is principal-agent. In Bharti Cellular/Airtel (SC, Feb 2024) discounts to prepaid SIM distributors on principal-to-principal terms were held outside s.194H.
Is TDS deducted on the GST component?
No — per CBDT Circular 23/2017, TDS applies on the amount excluding GST if GST is shown separately in the invoice.
What if the agent retains commission and remits the net amount?
TDS still applies — retention is constructive payment of commission and the principal must gross it up and deduct.