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Section 194H TDS on commission and brokerage with the 2% rate from October 2024 and the Rs 20,000 annual threshold.
This calculator applies section 194H of the Income-tax Act to a commission or brokerage payment, picking the rate and the threshold from the date of payment: 2% for payments made on or after 1 October 2024 (5% before that), against an annual exemption of Rs 20,000 from FY 2025-26 and Rs 15,000 earlier. Because the limit is tested on the financial-year aggregate paid to one agent, it also shows the catch-up deduction on the payment that breaches the limit. Built for businesses paying sales agents, distributors and brokers, and for agents checking their own net receipt.
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Applies 5% or 2% from the actual date of payment rather than guessing the year.
Uses Rs 20,000 from FY 2025-26 and Rs 15,000 for earlier years automatically.
Derives the fee from a transaction value and percentage before computing the deduction.
2% for commission or brokerage paid or credited on or after 1 October 2024, down from 5% earlier, following the Finance (No. 2) Act 2024. Payments to residents carry no surcharge or health and education cess.
Rs 20,000 of aggregate commission or brokerage to one payee in a financial year from FY 2025-26 onwards, raised from Rs 15,000 by the Finance Act 2025. Once the yearly total crosses the limit, tax is deducted on the entire aggregate, including the payments made earlier in that year.
No. Insurance commission is covered by section 194D, which has its own rate and threshold. Section 194H also excludes brokerage on transactions in securities and payments for professional services, which fall under section 194J.
Generally no, if the parties deal on a principal-to-principal basis and the discount simply reduces the sale price. Commission implies an agency relationship where the payee acts on behalf of the payer. The distinction is fact-specific and has been litigated often, so have your distributor agreement reviewed by a tax professional before deciding.
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