Section 194D: According to Section 194D, any payment made as remuneration in the form of commission or for procuring insurance business which includes renewal, the revival of policies, or continuation of insurance business. TDS must be deducted while crediting the money to the payee’s account or while making payment in cash, draft, cheque, or any other modes.
The amount of TDS is deductible only when the payable amount or the amount paid or the aggregate amount of such income paid or credited exceeds ₹15,000 during the financial year.
Time And Limit of Deduction
TDS is to be deducted whichever is earlier, which are as follows:
- While the commission is credited to the payee’s account.
- While the payment is made in the cheque, draft, cash, or other modes.
There are different rates based on the type of payee. According to section 194D, the rates are as follows:
- For individuals, tax is to be deducted at 5%
- For domestic companies, tax is to be deducted at 10%.
Under Section 194D Threshold Limit And TDS Rate
| Basis | Before June 1, 2016 | From June 1, 2016 |
| Threshold limit | ₹20,000 | ₹15,000 |
| When PAN is furnished | 10% | 5% |
| When PAN is not furnished | 20% | 20% |