Home > Income Tax > TDS/TCS > TDS from insurance commission – Sec 194D

TDS from insurance commission – Sec 194D

U.C Date : 25 Apr 2016

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.

Bare Act for Sec 194D

Bare Act for Sec 194D

Any person responsible for paying to a resident any income by way of remuneration or reward, whether by way of commission or otherwise, for soliciting or procuring insurance business (including business relating to the continuance, renewal or revival of policies of insurance) shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force.

Provided that no deduction shall be made under this section from any such income credited or paid before the 1st day of June, 1973.

Provided further that no deduction shall be made under this section in a case where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year to the account of, or to, the payee, does not exceed twenty thousand rupees. (15,000 from 1st June 2016.)

Get updates and weekly newsletter in your email. Join more than 10,000 subscribers !