Section 194H is for income tax deducted on any income by way of commission or brokerage, by any person responsible for paying to a resident. (Section 194H does not include insurance commission referred to in section 194D.)
Individuals/HUFs who were covered under section 44AB(a) and (b) in the preceding previous year i.e. whose gross turnover/receipts of the business/profession in the immediately preceding financial year exceeded business/profession in the immediately preceding financial year exceed Rs. 1 Crore of 50 Lacs, as the case may be, are also required to deduct tax at source
To fall in applicability, there must be Principal-Agent relation.
Point of Deduction and Rate:
It will be deducted at the time of credit of such income to the account of the payee or to any account or at the time of payment W.e. is earlier
TDS will be deducted at 5%. The rate of TDS will be 20% in all cases, if PAN is not furnished by the deductee.
Currently above rate becomes 3.75% for any transactions took place between 14th May 2020 to 31st March 2021.
Exceptions:
Read more on: https://taxguru.in/income-tax/section-194h-tds-commission-brokerage-case-laws.html
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