Understanding Section 194H: Income Tax on Commission and Brokerage

Learn about Section 194H and its implications for TDS on commission payments in India.

180 views

Section 194H pertains to the income tax on commission or brokerage. It requires the deduction of TDS at 5% on any commission or brokerage payment exceeding ₹15,000 in a financial year. The deductor must deposit the deducted tax to the government. This helps in tracking and taxing income from commissions and prevent tax evasion.

FAQs & Answers

  1. What is Section 194H of the Income Tax Act? Section 194H pertains to the deduction of income tax on commission or brokerage payments, requiring TDS at 5% on amounts exceeding ₹15,000 in a financial year.
  2. Who is responsible for deducting TDS under Section 194H? The deductor, typically the person or entity paying the commission or brokerage, is responsible for deducting the TDS before making the payment.
  3. What is the threshold limit for TDS deduction under Section 194H? The threshold limit for TDS deduction under Section 194H is ₹15,000 in a financial year; payments above this amount are subject to TDS.
  4. Why is TDS deducted under Section 194H? TDS under Section 194H is deducted to ensure proper collection of tax on income from commissions, thereby preventing tax evasion and ensuring compliance with tax laws.

Watch More

To further enhance your understanding of income tax regulations and responsibilities, check out our related videos on TDS deductions, the importance of filing income tax returns, and detailed breakdowns of other sections of the Income Tax Act. Staying informed will help you make the best financial decisions.

  1. Understanding Section 194A of the Income Tax Act: TDS on Interest Explained Explore Section 194A of the Income Tax Act concerning TDS on interest payments, essential for tax compliance.
  2. Understanding Section 193 of the Income Tax Act: TDS on Interest Learn about Section 193 of the Income Tax Act and its implications for TDS on interest payments. Essential for tax compliance.
  3. Understanding Section 195 of the Income Tax Act: A Guide to TDS for Non-Residents Learn about Section 195 of the Income Tax Act and its importance in TDS deductions for payments to non-residents.
  4. How to Avoid TDS Tax: Essential Tips and Tricks Learn effective strategies to avoid TDS tax, including important forms and investments for tax-saving.
  5. How to Stop TDS Deduction: A Step-by-Step Guide Learn how to stop TDS deductions by submitting the correct forms and eligibility criteria in this concise video.
  6. How to Legally Avoid TDS Tax: Essential Tips Learn effective ways to legally avoid TDS tax with our essential tips and professional advice.