Aug12
2019There are various provisions related to TDS in the Income Tax Act, 1961. One of the very important provisions related to TDS is TDS on TDS on insurance commission under section 194D. In this article we are going to discuss section 194D in to detail.
Applicability of Provisions of section 194D:
The person who is responsible for making payment to a Resident Person in respect of the below mentioned expenses is required to deduct TDS:
Note: Thus, provisions of section 194D applies only to the payment made to a resident person. Payment made to a non-resident person is not covered under section 194D, the same is governed by section 195.
Rate of TDS on Insurance Commission:
If the provisions of section 194D of the Income Tax Act, 1961 is applicable, the Deductor is required to deduct TDS at the following rates:
Particulars | Rate of TDS |
Domestic Company | 10% |
A Resident person other than a domestic company | 5% |
In case PAN is not furnished | 20% |
Note: No surcharge, education cess or SHE cess shall be added to the above rates. However, if the PAN is not furnished, the Deductor is required to deduct TDS @ 20% i.e., maximum marginal rate.
Time of Deduction of TDS on Insurance Commission:
The Deductor who is liable to deduct TDS under provisions of section 194D of the Income Tax Act, 1961 is required to deduct TDS within earlier of the following dates.
OR
Cases when TDS is not to be deducted under section 194D:
Under the following cases, the TDS is not to be deducted: