Section 194A of the Income Tax Act deals with TDS on interest income. It applies to payments made by banks, financial institutions, companies, and individuals.Key Highlights Threshold Limit: Rs.50,000 for bank and post office interest. (Rs.1 lakh for senior citizens)TDS Rate: 10% TDS is deducted on interest crossing threshold limit.Form 15G/15H: File form 15G or 15H to avoid TDS deduction on your interest income (applicable in specific cases).What is Section 194A?Section 194A of the Income Tax Act, 1961 mandates the deduction of TDS on interest income other than interest on securities. It applies to payments made by banks, financial institutions, companies, and individuals where interest is credited or paid on deposits, loans, or advances. TDS is generally deducted at a rate of 10%, but if the recipient fails to provide a PAN, the rate increases to 20%.Threshold Limits:Banks / Post Offices / Cooperative Societies: TDS is deducted only if the total interest exceeds Rs.

The Income Tax Act 2025 will be effective from 1 April 2026 and replaces the six decade old Income Tax Act 1961. The new Act simplifies tax provisions, introduces a single “Tax Year” concept, and retains both the New and Old Tax Regimes with updated income tax slabs and rebate provisions.Income Tax Act 2025 - Key HighlightsReplaces the Income Tax Act 1961, effective 1 April 2026Introduces a single Tax Year concept replaces Financial Year & Assessment YearNew Regime: zero tax up to Rs. 12 lakh after rebateOld Regime: zero tax up to Rs. 5 lakh after rebate1. What is Income Tax Act, 2026?The Income Tax Act 2025 is the new tax law introduced to replace the Income-tax Act, 1961 and simplify India’s income tax framework.

Section 194H deals with tax deduction (TDS) at a rate of 2% on commission or brokerage payments (other than insurance commission), applicable when such payment exceeds Rs. 20,000 in a financial year. TDS under this section must be deducted by any resident person and entity including individuals and HUFs, if their total sales, turnover, or gross receipts exceed Rs.1 crore (in case of business) or Rs.50 lakhs (in case of profession) during the preceding financial year.In this article, we will discuss the TDS on commission and brokerage in detail.What is Section 194H?Section 194-H of the Income Tax Act 1961 governs the tax deduction at source (TDS) on payment made as commission or brokerage at a rate of 2%.TDS under this section is to be deducted only if such payment for commission or brokerage exceeds Rs 20,000 in the financial year. It means no TDS shall be deducted if payment or aggregate payment for commission or brokerage in the financial year does not exceed Rs.20,000. The threshold limit for section 194H is increased to Rs.20,000, effective 1 April 2025.Section 194-H applies to any resident person or entity liable for making payment as commission or brokerage, including an individual or a Hindu undivided family (HUFs), whose total sales, gross receipts or turnover exceeded,Rs.1 crore in case of business, or,Rs.50 lacs in case of profession during the financial year immediately preceding the financial year in which such commission or brokerage is credited or paid.It is to be noted that section 194H does not apply to commission payments for insurance and professional services.What is the Rate of TDS under section 194-H?The rate of TDS is 2%. No surcharge, education cess, or SHEC shall be added to the above rates.The rate of TDS will be 20% in all cases if the deductee does not quote PAN.What is the Meaning of Commission and Brokerage under section 194-H?Commission or brokerage includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person.TDS on commission or brokerage includes,for services rendered (not being professional services), orfor any services in the course of buying or selling of goods, orin relation to any transaction relating to any asset, valuable article or thing, except securitiesCommission is quite common across industries like real estate, financial services, sales where agents/intermediaries plays a key role in closing the deals or facilitating transactions.Similarly, brokerage is received by a broker for completing deals between buyers and sellers in markets such as stocks, insurance, real estate etc. When does TDS under Section 194H Need to be Deducted?TDS under Section 194H will be deducted at the time of payment or credit of such income to the account of the payee , whichever is earlier. Under What Circumstances TDS u/s 194H is Not Deductible?Brokerage or commission is less than or equal to Rs.20,000 in a financial year.Any payment of commission or brokerage payable by Bharat Sanchar Nigam Limited or Mahanagar Telephone Nigam Limited to their public call office franchisees.When an employer is paying a commission to the employee, TDS is deducted under Section 192 of the IT Act.Brokerage or commission related to transactions in securities.Brokerage or commission related to professional services.Commission on insurance income and loan underwriting.The person can make an application to the assessing officer under Section 197 for deduction of tax at NIL rate or at a lower rate.Payments made by television channels/newspaper companies to the advertising agency for booking or procuring of or canvassing for advertisements.Turnover Commission payable by the RBI to the Agency Banks.No TDS deduction on the interest accrued on NRE accounts.Interest earned on deposits in savings bank account, NSC, Indira Vikas Patra and Kisan Vikas Patra are not subject to TDS.In a significant development, the Supreme Court recently held that under Section 194-H of the Income Tax Act, 1961, cellular mobile service providers are not liable to deduct tax at source on income/profit component in payments received by their franchisees / distributors from third parties/customers.Section 194-H TDS Deposit Due Date?TDS deposit and return filing due date for section 194-H of Income Tax Act 1961, given in the table below:QuarterTDS Statement/Return Filing Due Date Form-26Q1st Qtr. (April to Jun)On or Before 31st July 20252nd Qtr.

Section 194T of the Income Tax Act has been introduced to regulate tax deduction on payments made by firms or LLPs to their partners. It covers various forms of partner income, including salary, interest, commission, bonus, and remuneration. This provision aims to ensure better compliance and bring greater transparency in partnership taxation.Key HighlightsThreshold limit: No TDS if aggregate payment to a partner does not exceed Rs.20,000 in a financial year.Timing of deduction: TDS is deducted at the earliest of credit to the partner’s account or actual payment.Withdrawals from a partner’s capital account are not subject to TDS What is Section 194T of Income Tax Act?Section 194T, introduced in Budget 2024, marks a significant shift in partnership taxation. Effective from 1st April 2025, payments such as salary, remuneration, interest, commission, or bonus made by firms and LLPs to their partners will be subject to TDS. Earlier, such payments were outside the scope of TDS, which applied only to employee salaries.Under this provision, firms and LLPs must deduct TDS at 10% if the total payment to a partner exceeds Rs.20,000 in a financial year. No TDS is required when the aggregate payment during the year does not cross this threshold.Applicability of Section 194T of Income Tax ActThe following payments by a firm to a partner are covered in Section 194T:SalaryRemunerationCommissionBonus orInterest on any account (It can be on a loan account or on a capital account).Rate of Deduction of TDS and Limit for Section 194TThe rate at which TDS is to be deducted is 10%.

Section 194I of the Income Tax Act TDS applies for rent on machinery, building, land and furniture. TDS on rent is 10% on land, building and furniture and 2% for machinery. TDS will be deducted if the rent exceeds Rs. 6 lakh in the financial year.When the rent is paid to an NRI, TDS at 30% must be deducted, irrespective of the amount paid. Surcharge and cess should also be deducted over and above TDS.What is Section 194I?Section 194I of Income Tax Act mandates that Tax (TDS) be deducted on rent. TDS rates are as follows:For plant, machinery, or equipment - 2%,For land, building, furniture and fittings - 10%No TDS required if the rent payment in within the limit of Rs.

As per the provisions of the Income Tax Act,1961, if the business or profession turnover exceeds prescribed threshold limit, the assessee is required to get the books of accounts audited before filing a tax return. The due date to file ITR for taxpayers requiring tax audit under Section 44AB is 31st October 2026 for FY 2025-26 (AY 2026-27).Budget 2026 UpdateAmount payable on default of submitting the tax audit report has been converted from penalty to fees. This is intended to reduce litigations.What is a Tax Audit?Tax audit is an examination or review of books of accounts of any business or profession carried out by taxpayers from an income tax viewpoint.Section 44AB of the income tax act mandate tax audit for businesses have turnover more than Rs. 1 Crore or Rs. 10 Crore (where more than 95% of receipts are digital).

Section 80C deductions allow taxpayers to reduce their taxable income by investing in specified instruments or making eligible payments. Under Section 80C of the Income Tax Act, individuals and HUFs can claim deductions of up to Rs. 1.5 lakh for investments such as PPF, ELSS, life insurance premiums, NSC, home loan principal repayment, and children’s tuition fees.Section 80C is one of the most widely used tax-saving provisions in India because it covers both investments and essential expenses. By strategically investing in eligible instruments, taxpayers can significantly lower their taxable income while building long-term savings.However, deductions under Section 80C are available only under the old tax regime. Taxpayers opting for the new regime cannot claim these deductions.List of Deductions Under Section 80CThe following investments and exepenses can be claimed as Section 80C Deductions:Life insurance premium paymentsPublic Provident Fund (PPF)Employee Provident Fund (EPF) contributionsEquity Linked Savings Scheme (ELSS) mutual fundsNational Savings Certificate (NSC)Sukanya Samriddhi Yojana (SSY)5 year tax-saving fixed depositsSenior Citizen Savings Scheme (SCSS)Home loan principal repaymentStamp duty and registration charges on property purchaseTuition fees paid for up to two childrenHowever, a combined deduction of up to Rs.

TDS has to be deducted on any payment made to a non-resident individual or a foreign company. Such payments will be taxed as per the Income Tax Act rates or the DTAA rates. Filing Form 15CA and Form 15CB is now necessary to make foreign payments. These forms ensure proper compliance and deduction of tax before making any payments to non-residents. Through a press release dated 14 June 2021, the income tax department has relaxed the requirement of furnishing Form 15CA/15CB electronically on the new e-filing portal www.incometax.gov.in. The taxpayers can submit the said forms in manual format to the authorised dealers until 30 June 2021.As per the provisions of the new Income Tax Rules 2026, Form 15CA and 15CB has been replaced by Form 145 and Form 146 respectively.Form 15CAForm 15CA is a declaration form requiring information regarding payments to non-resident individuals or a foreign company to be furnished by persons making such payments before remitting the amount.

Filing Form 26Q is a crucial obligation for any payer who deducts Tax Deducted at Source (TDS) on payments other than salary. This quarterly return provides the Income Tax Department with essential information about various payments, ensuring transparency and compliance with tax regulations. Understanding how to accurately file Form 26Q is crucial to avoid penalties and interest for late filing.The total amount paid during the quarter and TDS deducted on such payments have to be reported in 26Q.As per the provisions of the new Income Tax Rules 2026, Form 24Q has been replaced by Form 140.TDS Sections Covered in 26QSectionNature Of Payment193Interest on securities194Dividend194AInterest other than Interest on Securities194BWinnings from lotteries and crossword puzzles194BBWinnings from horse race194CPayment to contractors and subcontractors194DInsurance commission194DAMaturity of life insurance policy194EEPayment in respect of deposit under National Savings Scheme194FPayments on account of repurchase of units by Mutual Funds or UTI194GCommission, prize, etc., on sale of lottery tickets194HCommission or Brokerage194I(a)Rent (for machinery or plant)194I(b)Rent (for land or building)194JFees for Professional or Technical Services194LAPayment of Compensation on acquisition of certain immovable property194LBACertain income from units of a business trust194DAPayment in respect of life insurance policy192APayment of accumulated balance due to an employee from thetrustees of the Employees’ Provident Fund Scheme, 1952194LBBIncome in respect of units of an investment fund194IAPayment on transfer of certain immovable property other thanagricultural land (where the buyer is TAN holder)194LBCIncome in respect of investment in securitization trust194NPayment of certain amounts in cash194OPayment of certain sums by e-commerce operator to e-commerce participant194QTDS on purchase of goods194RTDS on benefit or perquisite in respect of business or profession194STDS on transfer of Virtual Digital Assets197ADetails of payment where there is no deduction of tax in certain casesDetails to be Filled in 26QAs against 24Q which contains 3 annexures, Form 26Q contains only one annexure. Challan details (BSR code, date of payment, total amount etc.), details of deductor and deductees are to be mentioned. Along with this, if the deductor hasn’t either deducted TDS or deducted it at a lower rate, reasons are also to be mentioned in the form.Due Date of Filing 26QThe due date of filing form 26Q is as follows:QuarterDue DateApril to June31st JulyJuly to September31st OctOctober to December31st JanJanuary to March31st MayInterest for Late Deduction or Late DepositIf TDS is not deducted – 1% per month, from due date of deduction to actual date of deductionIf TDS is deducted but not deposited – 1.5% per month, from actual date of deduction to actual date of paymentIf TDS is not deducted or deposited, the expense will be disallowed for computing taxable income:For Payments made in India: If TDS is required but not deducted, 30% of the expense amount will be disallowed when computing taxable income.For Payments made outside Indian: The entire amount of the expense on which TDS was required but not deducted will be disallowed.Penalties for Late Filing of 26QLate Filing Fees – under section 234E, a fine of Rs.

At the time of paying salary to an employee, the employer deducts TDS under section 192 of the Income Tax Act 1961. The employer has to file salary TDS return in Form 24Q every quarter. Details of salary paid to the employees and TDS deducted on such payment are to be reported in 24Q. You can easily file your TDS returns through ClearTax software i.e. ClearTDS.24Q consists of 3 annexures – Annexure I, Annexure II and Annexure III.While Annexure I has to be submitted for all four quarters of an FY, Annexure II and Annexure III are not required to be submitted for the first three quarters. Annexure II and Annexure III have to be submitted in the last quarter (Jan – Mar) only.TDS on salary has to be deducted as per the income tax slab.