2. Who is liable to Deduct TDS under Section 194H
Any person, (other than individual or a Hindu undivided family) who is responsible for paying, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or brokerage, shall, deduct income-tax thereon.
However, individuals and HUF who were covered under section 44AB(a) and (b) in the preceding previous year, are also required to deduct tax at source.
3. When TDS under Section 194H is to be Deducted
It will be deducted at the time of credit of such income to the account of the payee or to any account, whether called suspense account or by any other name or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier.
4. TDS Rate under Section 194H for the Financial Year 2018-19 and 2019-20
The rate of TDS shall be 5%.
No surcharge, education cess or SHEC shall be added to the above rates. Hence, tax will be deducted at source at the basic rate.
The rate of TDS will be 20% in all cases, if PAN is not quoted by the deductee.
5. Where No TDS is to be Deducted under Section 194E
(1) No deduction shall be made under this section in a case where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year to the account of, or to the payee, does not exceed Rs.15,000.
(2) No deduction shall be made under this section on any commission or brokerage payable by Bharat Sanchar Nigam Ltd. or Mahanagar Telephone Nigam Ltd. to their public call office franchisees.
6. Where TDS under Section 194H is either Not to be Deducted or to be Deducted at Lower Rate [Section 197]:
The person receiving the commission or brokerage may make an application in new Form 13 to the concerned Assessing Officer and obtain such certificate, as may be appropriate, authorizing the person responsible for making such payment to deduct tax at nil rate or at lower rate. The certificate will be given by the Assessing Officer if he is satisfied that it is justified to do so.
As per section 206AA(4), no certificate under section 197 for deduction of tax at Nil rate or lower rate shall be granted unless the application made under that section contains the Permanent Account Number of the applicant.