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Tds under section 194h commission & brokerage

Prateek Rajpal (Accountant) (28 Points)

10 May 2018

I AM WORKING IN A TRAVEL COMPANY WHICH PAYS COMMISSION COMMISSION TO THEIR AGENTS AND DEDUCTS TDS @ 5%.

LIMIT FOR DEDUCTING TDS IS RS. 15000 ANNUALLY, BUT NOW I HAVE TO DEDUCT TDS ON MONTHLY BASIS, SO SUGGEST ME HOW CAN I GET AN IDEA WELL IN ADVANCE THAT WHETHER COMMISSION AMOUNT IS MORE THAN 15000 OR NOT.

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4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160551 Points)
Replied 10 May 2018

You can deduct TDS on aggregate amount as and when you cross the limit; but practically it is difficult when the final amount payable is less than TDS on aggregate amount.

So, you may deduct TDS from the beginning of the year wherever the amount is likely to cross the basic limit.

1 Like

prasad Nilugal ( GST Practitioner & Accounts ) (14187 Points)
Replied 10 May 2018

If you are paying commission 1250/- or more per month in F.Y. then you have to deduct TDS @ 5% per month (194H - I.T act 1961)

(1250*12 = 15000/-)

Prateek Rajpal (Accountant) (28 Points)
Replied 10 May 2018

Mr. Prasad Nilugal,

But how could i know in well advance that commission amount will cross 1250/- month.

If commission in month of Apr = 2000, may = 700, june = 200, july = 1500.

Total amount = 4400, but if we calculate by 1250/- month, it will 5000 for four month.

Actually we have deducted TDS considering 2000/- in the month of april, but in reality aggregate total amount is less than 1250/- month.

So deducting in one month and not in other month will create issues.

So Suggest some concrete answers.

prasad Nilugal ( GST Practitioner & Accounts ) (14187 Points)
Replied 10 May 2018

See , I have given you estimeted amount 1250/- per month it may differ , more or less . check last year commission paid . After all its all on estimated amount for F.Y. .

Also requried valid TAN no of income tax dept for TDS deduction ,hope you are having . One more thing that Gst applicable on commission so you have exclude gst amount , while calculating TDS .