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TDS on brokerage commission charges

sujin (accounts executive) (219 Points)

01 February 2023

dear experts,
our company started a new office for rental near by our plant for this we given brokerage charges to vendor this service comes under which section under tds

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5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160609 Points)
Replied 01 February 2023

Section 194H of IT act deals with TDS deduction on the payment of commission or brokerage.

It mandates tax deduction by the person (other than individual/HUF) responsible for paying commission or brokerage to resident persons at the rate of 5% when the amount exceeds Rs.15000 in a year.

sujin (accounts executive) (219 Points)
Replied 01 February 2023

But it is the company not resident person

Dibyendu Majumder (142 Points)
Replied 01 February 2023

Then Deduct TDS U/S 195 as per applicable rate

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160609 Points)
Replied 01 February 2023

Originally posted by : sujin
	But it is the company not resident person

Normally a ‘Person’ refers to an ‘Individual’, however under Income Tax, the person has broader meaning and coverage. For the purpose of charging Income-tax, the term ‘person’ has been defined under Section 2(31) of the Income Tax Act, 1961 to include Individuals, Hindu Undivided Families [HUFs], Association of Persons [AOPs], Body of individuals [BOIs], Firms, LLPs, Companies, Local authority and any Artificial Juridical Person (AJP).