Is TDS applicable or not u/s 194C to Insurance Company

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A government department is deducting TDS at 2% under Section 194C on a Rs 55 lakh payment to an insurance company for fish stock insurance. The insurance company claims TDS is not applicable. Standard practice suggests TDS is generally not applicable on insurance premiums unless there's a separate service component involved.

Vivek Shrivastava

Vivek Shrivastava (Querist)

27 March 2025 Respected Sir/ Madam,
One of my Govt. Body Client ( Fishery Department ) deduct Tds u/s 194c @2% of an Insurance Company, on payment of Rs 55.00 lacs and insurance is for their fish stock. My question is it correct or not because Insurance company said tds is not applicable on Insurance company. Kindly Resolve this issue.

Thanks & Regards
Vivek

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

27 March 2025 Correct. Based on standard practice, no TDS is applicable on insurance premiums paid to an insurance company by a policyholder, unless there be any other service component involved other than insurance.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

30 September 2025 Good luck....

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