Commission to commodity broker

TDS provisions are not applicable to commission obtained from trading in securities. Securities include derivatives. Therefore, TDS provisions will not apply to commission received as trading in derivatives. Thus, TDS provisions shall not apply to commodity derivatives.

However, if the transaction results in actual delivery of commodity, then one may argue that commission relates to services in the course of buying or selling goods and is accordingly subject to TDS.

commission includes any payment received or receivable directly or indirectly by person acting on or behalf of any other person 1. for any services rendered 2.for any service in course of buying and selling of goods 3. in relation to any securities, therefore u/s 194h TDS gets attracted in commodity based transactions (the relavent circular is 619 dt.04/12/1991.)as per this circular TDS needs to be deducted while paying to commodity broker