Tds
This query is : Resolved
21 July 2015
Can we avoid TDS On LIC commission..??
Please reply as soon as possible
Please reply as soon as possible
27 July 2025
Regarding your query about **avoiding TDS on LIC commission**:
* **TDS on commission paid to LIC agents** is governed under **Section 194H** of the Income Tax Act.
* As per the law, **if the commission amount exceeds ₹15,000 in a financial year**, the payer (insurance company or party paying commission) **must deduct TDS** at the prescribed rate (usually 5%).
* **If the commission amount is less than ₹15,000 in the year, no TDS is required to be deducted.**
### Can you avoid TDS on LIC commission?
* **No, TDS cannot be avoided if the payment exceeds the threshold limit.**
* However, if the payee (LIC agent) provides **valid PAN**, TDS will be deducted at the normal rate (5%).
* If **PAN is not provided**, TDS will be deducted at a higher rate of 20%.
* There are **no exemptions or exclusions specifically for LIC commissions** under TDS provisions.
---
### Summary:
| Condition | TDS Deduction Required? |
| ------------------------------ | ------------------------- |
| Commission paid > ₹15,000/year | Yes, TDS @ 5% (with PAN) |
| Commission paid ≤ ₹15,000/year | No TDS deduction required |
| PAN not provided | TDS @ 20% |
---
If you want, I can help you with references to the Income Tax Act or assist in TDS calculation for LIC commissions. Would you like that?
* **TDS on commission paid to LIC agents** is governed under **Section 194H** of the Income Tax Act.
* As per the law, **if the commission amount exceeds ₹15,000 in a financial year**, the payer (insurance company or party paying commission) **must deduct TDS** at the prescribed rate (usually 5%).
* **If the commission amount is less than ₹15,000 in the year, no TDS is required to be deducted.**
### Can you avoid TDS on LIC commission?
* **No, TDS cannot be avoided if the payment exceeds the threshold limit.**
* However, if the payee (LIC agent) provides **valid PAN**, TDS will be deducted at the normal rate (5%).
* If **PAN is not provided**, TDS will be deducted at a higher rate of 20%.
* There are **no exemptions or exclusions specifically for LIC commissions** under TDS provisions.
---
### Summary:
| Condition | TDS Deduction Required? |
| ------------------------------ | ------------------------- |
| Commission paid > ₹15,000/year | Yes, TDS @ 5% (with PAN) |
| Commission paid ≤ ₹15,000/year | No TDS deduction required |
| PAN not provided | TDS @ 20% |
---
If you want, I can help you with references to the Income Tax Act or assist in TDS calculation for LIC commissions. Would you like that?
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