TDS ON COMMISSION OR BROKERAGE – SECTION 194H – F.Y 2012-2013
Rate of TDS on Commission & Brokerage is 10% u/s 194H if your commission exceeds Rs. 2,500/- in the Financial Year.
TDS rate is increased by surcharges @ 10% on above rate if you , other than Co. & Total Commission in the F.Y 2012-2013 more than 10 Lakhs and in case of Co. than Total Commission is more than 1 Crore.Commission and brokerage to a resident (section 194H). You must deduct TDS at 10.3% of commission and brokerage. (Exception: Individuals and HUF whose sales/gross receipts in business is less than Rs 40 lacs or professional receipts is less than Rs 10 lac are not required to deduct the TDS). The surcharge rate is 1%.
TDS above Rate of TDS & Surcharge further increased by Education Cess & Higher Education Cess @ 3%.
Hence the total Rate is 10.3% (if Surcharge not applicable), otherwise 11.33%.
Nature : Payment to Resident by way of commission or brokerage
Rate of TDS : 10% ( Individuals and HUF required to deduct tax only when subject to tax audit in preceding financial year).
Exemptions:
- Aggregate payment during the Financial Year does not exceed Rs. 5000
- Turnover commission : payable by RBI to Agency Banks : Circular no. 6/2003 dated 03.09.2003
- Payments of brokerage on purchase and sale of securities
- Insurance commission
