TDS on Fee/Brokerage – Part 194H

TDS on Fee/Brokerage is required to be deducted underneath Part 194H by the particular person making the cost by the use of fee or brokerage. TDS on Fee/Dealer is required to be deducted @ 10% on the time of:-

  1. Making such cost or
  2. Credit score of such revenue to the account of the payee within the books of the particular person deducting such TDS

whichever is earlier.

The Fee of TDS has been lowered from 10% to five% in Price range 2016. This revised charge can be relevant from Monetary Yr 2016-17.

TDS on Fee/ Brokerage

TDS on Fee/Brokerage is to be deducted by all individuals besides Particular person & HUF. Nonetheless, People & HUF are additionally liable to deducted TDS on Fee in case the person or HUF is liable get his tax audit carried out underneath Part 44AB i.e. their turnover/receipts exceed Rs. 25Lakhs/ 1 Crore (because the case could also be)

  • Really helpful Learn: Tax Audit underneath Part 44AB

No further surcharge or Training Cess is required to be deducted over and above the tds charges as specified. Due to this fact, TDS must be deducted @ 10% on the overall quantity inclusive of Service Tax (if any).

  • Really helpful Learn: TDS on Service Tax

The TDS deducted underneath Part 194H is required to be deposited by with the Govt. earlier than the due date of cost of TDS by the one who has deducted the TDS. On the time of deposit of TDS with the Govt., the TAN No. of the particular person deducting the TDS and the PAN Card No. of the particular person whose TDS has been deducted must also be quoted.

That means of Fee or Brokerage

Fee or Brokerage contains any cost acquired or receivable, immediately or not directly, by an individual appearing on behalf of one other particular person for companies rendered (besides skilled companies) or for any companies in the middle of shopping for or promoting or in relation to any transaction regarding any asset; worthwhile article or factor (besides securities)

As TDS on Fee shouldn’t be liable to be deducted in relation to transactions associated to securities, the provisions of Part 194H should not attracted on:-

  1. Brokerage or Fee paid to underwriters
  2. Brokerage and sub-brokerage on public subject of securities
  3. Brokerage on inventory change transactions of securities

Exceptions to TDS on Fee/Brokerage

TDS on Fee/ Brokerage shouldn’t be liable to be deducted within the following circumstances:-

  1. The quantity paid or payable throughout the monetary 12 months doesn’t exceed Rs. 15000 (Restrict elevated from Rs. 5000 to Rs. 15000 in Price range 2016)
  2. Cost is being made by BSNL or MTNL to their public name middle franchisees
  3. Fee is being paid by an employer to his workers. Such fee is liable to be deducted as TDS on Wage underneath Part 192.
  4. TDS on Insurance coverage Fee shall not be deducted underneath this part as that has been particularly lined underneath Part 194D

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