This discussion clarifies the taxability of Pigmy commissions. If received on a regular basis, it is generally classified as business income under the Profits and Gains of Business or Profession (PGBP) head. The content also touches upon Tax Deducted at Source (TDS) under Section 194H, which applies to commission or brokerage payments made to residents.
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. Individuals and Hindu Undivided Family who were covered under section 44AB are also required to deduct TDS.
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