In My Opinion
“Any person paying commission
(other than that referred to in Sec.194D of the Income Tax Act) or brokerage
exceeding Rs. 5,000/- per annum to any resident person is liable to deduct tax
at the rate of 10% at the time of credit or payment, whichever is earlier, as
per Sec. 194H of the Income Tax Act. Commission or Brokerage includes any
payment received directly or indirectly by a person acting on behalf of another
person for non-professional services for buying or selling of goods or asset,
valuable article or things that are not securities.
Securities have meaning as per
the Securities Contract (Regulation) Act, 1956, and includes shares, scrips,
stocks, bonds, debentures, debenture stock or other marketable securities in or
any of any incorporated company or other body corporate; derivatives; units or
any other instrument issued by any collective investment scheme to the
investors in such schemes; security receipt as defined in Sec. 2(zg) of the
Securitization And Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002; government securities; such other instruments as
may be declared by the Central Government to be securities; and rights or
interests in securities.
As payment of brokerage to
sub-brokers arises from brokerage received on securities, no TDS is deductible
on payment of commission on securities to sub-broker.”
It is advisable
“The main broker to deduct TDS on
payment to sub-broker to be on a safer side.”
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