Section 194D – TDS From Insurance Commission

194D – TDS from Insurance Commission – Quick Summary

Person Responsible to Deduct Tax Insurance companies
Exemption Limit Rs. 20,000 (Reduced to Rs.15,000 w,e,f, 01.06.2016)
Time of Deduction of TDS At the time of payment or credit whichever earlier.
Time for Deposit of TDS Within one week from of the day of the month of tax deduction. For month of March, before 30th April.
Certificate of TDS Form 16A for each quarter is to be issued within 15 days from the due date for furnishing the statement of tax deducted at source under rule 31A i.e. on or before 15th August, 15th November, 15th February and 15th June
Quarterly Return of TDS In Form No.26Q on or before 31st July, 31st October and 31st January for the first three quarters and on or before 31st May for the last quarter.
AO’s Certificate for Deduction at Lower Rate or Non Deduction Yes, Application in Form No. 13 Appropriate Certificate to be issued by AO
Is Self Declaration by Payee for Non Deduction Admissible Yes, it can be filed, by person other than Company or Firm. Declaration to be submitted in duplicate in Form No. 15G/ 15H.

Who is Required to Deduct TDS u/s 194D?

The person responsible for paying to a resident, the income mentioned below.

Remuneration or reward whether by way of commission or otherwise

  • for soliciting or procuring insurance business, or
  • for continuance, renewal or revival of policies of insurance.

If payment made to non-resident shall be covered under section 195.

What it exemption Limit Under Section 194D?

The exemption limit is Rs. 15000 w.e.f. 1st June 2016. First it was Rs. 20,000/-

What is the Rate of TDS u/s 194D for A.Y.2018-19 & A.Y.2017-18?

Resident person other than company 5%
Domestic Company 10%
  • No surcharge, education cess levied
  • Rate of TDS will be 20% if PAN is not available of deductee.

When Tax to be Deducted u/s 194D?

The tax is to be deducted on insurance commission under section 194D at time of earliest of the following situations.

  • The tax is to be deducted at the time of credit of commission in the account of payee
  • The payment with cash or cheque or in kind

Form 15G/15H Are Eligible or Not u/s 194D?

A person, other than a company or firm may submit a self declaration on 15G/15H as applicable in duplicate to the payer. In this case the payer will not deduct any tax at source.

TDS Statement/Returns Under Section 194D

In Form No.26Q on or before 31st July, 31st October and 31st January for the first three quarters and on or before 31st May for the last quarter.

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