TDS on Brokerage and Commission as per 194H

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This discussion clarifies the applicability of TDS under Section 194H for individuals with only salary income. It explains that individuals or HUFs are generally not required to deduct TDS on brokerage or commission unless their business or professional turnover exceeds specific thresholds in the preceding financial year. The conversation also touches upon how to prove the cost of acquisition to the IT department, advising to keep records like invoices and bank statements.

VaghBlogger

VaghBlogger (Querist)
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31 December 2024 I am Salaried individual and sold one property (house) during 2024 and made brokerage payment of 2.5 Lac to agent. As per 194H I understood that Individuals or HUF don't required deduct TDS for such transaction.

I am bit confused as various portal interprets this section differently.

What exactly is the requirement for Individual not having any income other than Salary

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 December 2024 Read: "" an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed one crore rupees in case of business or fifty lakh rupees in case of profession during the financial year immediately preceding the financial year in which such commission or brokerage is credited or paid, shall be liable to deduct income-tax under this section...... """
It means when you do not have any income from business or profession (but only from Salary); you are not liable to deduct TDS u/s. 194H IT act...

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VaghBlogger

VaghBlogger (Querist)
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31 December 2024 Thank you Dhiraj Sir for prompt response. One more leading question.

How to prove "cost of acquisition" to IT department? Is just keeping record of Invoice and Bank statement sufficient, incase if there query from department?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 December 2024 Where the capital asset became the property of the assessee:
a. on any distribution of assets on the total or partial partition of a Hindu undivided family;
b. under a gift or will;
c. by succession, inheritance or devolution;
d. on any distribution of assets on the dissolution of a firm, body of individuals, or other association of persons, where such dissolution had taken place at any time before 1.04.1987;
e. on any distribution of assets on the liquidation of a company;
f. under a transfer to a revocable or an irrevocable trust;
g. by transfer from its holding company or subsidiary company;
h. by transfer in a scheme of amalgamation
In all above cases, the cost of acquisition of the asset shall be the cost for which the previous owner of the property acquired it.
Where the cost for which the previous owner acquired the property cannot be ascertained, the cost of acquisition to the previous owner means the Fair Market Value on the date on which the capital asset became the property of the previous owner.

All relevant documents that reflect the purchase price and additional costs incurred during acquisition. This includes:
Purchase agreements
Invoices for additional costs (stamp duty, registration)
Payment receipts
Bank statements.
GST paid invoices, etc.

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