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Reinsurance brokerage section?

TDS 669 views 2 replies

Reinsurance brokerage paid to broker by reinsurance company will be covered under which section 194D or 194H and why?

Replies (2)
Quick Summary
Reinsurance brokerage is generally covered under Sec 194D as it relates to insurance commission paid to intermediaries. Sec 194H applies only if the payment is a general brokerage/commission outside insurance business.

As per section 194-D TDS will be deducted. Because Any person who makes a payment to resident in the form of remuneration or rewards as part of insurance business will be required to deduct TDS under this section.

Adding to this, the key distinction usually comes down to whether the payment is considered insurance commission or a general brokerage/service fee. If the broker is acting as an insurance intermediary, 194D generally applies, whereas 194H may come into play only when the nature of payment is pure commission outside insurance business.

PS: Section-wise comparison is also discussed in geometry dash world ICAI study material (available on icai.org).


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