BooksIQTDS applies at 2% on commission or brokerage (other than insurance commission) once the aggregate paid to a single payee in the financial year exceeds ₹20,000.
Key points
- The deductor is any person liable to tax audit, excluding individuals or HUFs unless they were themselves liable to audit under §44AB in the preceding FY.
- The rate is 2%, raised to 20% where the deductee has not furnished PAN.
- The 2% rate is itself a reduction — Finance Act 2024 cut the earlier 5% rate to 2% with effect from 1-Oct-2024.
- The threshold is aggregate commission or brokerage of more than ₹20,000 in a financial year (raised from ₹15,000 by Finance Act 2025 from FY 2025-26 onwards).
- Excluded categories include insurance commission (governed by §194D), brokerage on transactions in securities, commission on public issue of securities, and BSNL or MTNL franchise commission.
Reference: §194H, ITA 1961 — under ITA 2025 (FY 26-27 onwards), this is §393(1) Sl.1(ii)
This page is general information for Indian businesses, current as of the
financial year shown above — not legal or tax advice. Tax law changes,
and how a provision applies depends on your specific facts. Confirm the
current position with a qualified professional before you act.
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