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TDS from insurance commission – Section 194D

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Person responsible for paying to a resident commission or otherwise for soliciting or procuring insurance business including continuance, renewal or revival of policies is required to deduct TDS. TDS is required to be deducted at the time of credit of such amount or payment thereof whichever is earlier.

TDS is required to be deducted only when the aggregate of the amounts of such income credited or paid or likely to be paid or credited during the financial year exceeds rs. 20,000. (Rs. 15,000 from 1st June 2016)

Rate of TDS and Threshold Limits under Section 194D

From 1st June 2016 Before 1st June 2016
Threshold Limit Rs. 15,000 Rs. 20,000
If PAN is furnished 5% 10%
If PAN is not furnished 20% 20%

Assessee can apply to assessing officer for no TDS or TDS at lower rate under Section 197.

No adjustments permissible for debits – In case of reversal of commission paid to an agent, no adjustment is allowed to be made from amount of TDS. TDS is to be deducted from the whole of the commission credited or paid without deducting the amount of reversal if any.

Rohit Pithisaria

I am a Chartered Accountant based in Jaipur (Rajasthan). Started TaxAdda in 2011 as a blog and now providing various service related to GST and Income Tax to the client all over India. Also writing actively for TaxAdda blog and our e-Magazine on GST & Income Tax.

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