TDS on Commission in India: Section 194H and 393 Explained

By Arvind Kumar · Published 9 October 2026 · Updated 9 October 2026

TDS on commission is tax deducted at source before the money reaches you. The payer withholds 2% of your commission or brokerage and deposits it against your PAN, so a commission of 2,000 rupees arrives as 1,960. The rule lived in Section 194H of the Income-tax Act, 1961, and from 1 April 2026 it sits in Section 393(1) of the Income-tax Act, 2025. TDS is not an extra tax. It's an advance against the tax you owe, and you claim it back when you file your return.

Key takeaways- The rate is 2%, cut from 5% by the Finance (No. 2) Act, 2024 with effect from 1 October 2024. - TDS applies only once your commission from one payer crosses ₹20,000 in the financial year. Below that, nothing is deducted. - No valid PAN means 20% is deducted instead of 2%. - Deducted TDS is yours. It shows in Form 26AS and reduces your final tax bill or comes back as a refund.

What is TDS on commission?

TDS stands for Tax Deducted at Source. Rather than waiting for you to pay tax at the end of the year, the government requires the person paying you to withhold a slice and deposit it directly with the Income Tax Department, tagged to your PAN.

Commission or brokerage, defined. Payment received for services rendered in the course of buying or selling goods, or in relation to a transaction involving an asset, valuable article or thing. Commission on insurance policies sits under a different section of the Act.

So if you earn commission as a loan agent, a credit card referrer, a property broker or a product distributor, the payer deducts before paying you.

Why is my commission payout smaller than the rate quoted?

Because the quoted rate is the gross commission, and TDS comes off before it reaches your bank.

Take a commission of 2,000 rupees. At 2% the deduction is 40, so 1,960 reaches your account. That 40 isn't lost, and the company paying you hasn't kept it. It sits with the Income Tax Department under your PAN.

Most people are surprised by this on their first payout. Nothing has gone wrong here.

What are the TDS rates on commission?

The 2% rate applies from 1 October 2024, reduced from the earlier 5% by the Finance (No. 2) Act, 2024.

Rates as of 9 October 2026. TDS rates and thresholds change with each Finance Act, and the Income-tax Act, 2025 renumbered this provision from 1 April 2026. The figures here are taken from a published TDS rate chart for tax year 2026-27 (see Sources) and were correct on the date shown. Confirm the current rate on the Income Tax Department portal, or with a qualified tax professional, before relying on it for your own filing or deduction.

On the threshold: TDS starts once your total commission from one payer crosses ₹20,000 in a financial year. The limit was raised from ₹15,000 with effect from 1 April 2025, and ₹20,000 continues for the 2026-27 tax year (TDSMAN TDS & TCS rate chart, tax year 2026-27, updated 21 May 2026).

One detail that catches people out: the threshold is not an exemption. Once your annual total crosses it, TDS applies to the whole amount paid in that year, including earlier payments that were individually below the limit.

Section 194H or Section 393? Both, depending on the date

Parliament renumbered the provision when the Income-tax Act, 2025 replaced the 1961 Act.

Most people still search for 194H, and your older certificates will say 194H as well. The substance of the rule did not change with the renumbering.

How do I check the TDS deducted from my commission?

Your deductor files a quarterly return, after which the credit appears against your PAN.

1. Form 26AS. Your consolidated tax statement, viewable on the income tax e-filing portal. Every TDS entry against your PAN shows here with the deductor's name and the amount.
2. Form 16A. The TDS certificate your deductor issues each quarter for non-salary payments. Ask for it if you don't receive one.
3. The Annual Information Statement. A wider view of reported financial transactions.

Deductions can also look uneven across months, which is one reason commission income feels inconsistent even when sales are steady. If a deduction is missing from Form 26AS, the deductor has either not filed or has quoted the wrong PAN. Raise it with them, because you cannot claim credit for TDS that was never reported against you.

How do I get the TDS back?

You claim it when you file your income tax return.

TDS is an advance payment rather than a final tax. At filing you calculate the tax actually due on your total income, subtract the TDS already deducted, and either pay the shortfall or receive the excess as a refund.

If your total annual income falls below the taxable limit, the full amount deducted comes back to you. Many part-time earners never claim it simply because they do not file. The money simply stays with the department until they do.

How commission TDS works for GroMo Partners

GroMo is an Indian financial-products distribution platform where individuals refer products from partner banks, NBFCs and fund houses and earn a commission on approved referrals.

Those commissions count as commission income, so TDS applies in the normal way, exactly as on any other commission-earning app. A product listed at 2,000 rupees pays out 1,960 after 2% TDS, once your commissions from that payer pass ₹20,000 for the year.

Three practical points:

• Keep your PAN correct in the app. A missing or mismatched PAN means 20% instead of 2%.
• Check Form 26AS before filing, not after.
• File a return even if your income is small. Filing is how the deducted amount comes back.

Common mistakes people make with commission TDS

Treating TDS as a loss. It's an advance against your own tax bill, and it's recoverable in full if you end up owing nothing.

People skip the return when the income is small. No return means no refund, however little you earned, and that applies to every side income you have.

Ignoring a PAN mismatch. The gap between 2% and 20% is ten times the deduction, and it's entirely avoidable.

Assuming the rate is still 5%. Plenty of articles online haven't been updated since the October 2024 change.

Frequently asked questions

Below are the questions people most often ask alongside this one.

What is the TDS rate on commission?

2% on commission or brokerage where the payee has a valid PAN, applicable from 1 October 2024. Without a valid PAN, 20% is deducted.

Is TDS on commission refundable?

Yes. TDS is an advance against your annual tax liability. File your income tax return, and any amount deducted beyond what you actually owe is refunded.

What is Section 194H?

Section 194H of the Income-tax Act, 1961 governed TDS on commission and brokerage. From 1 April 2026 the same subject sits in Section 393(1) of the Income-tax Act, 2025.

Does TDS apply to small commission amounts?

Not until your total commission from one payer crosses ₹20,000 in that financial year. Once it does, TDS applies to the full amount paid in the year, including earlier payments below the limit.

How do I check if TDS was deducted on my commission?

View Form 26AS on the income tax e-filing portal. Each deduction appears against your PAN with the deductor's details. Your Form 16A certificate shows the same information for that quarter.

What happens if I do not have a PAN?

TDS is deducted at 20% instead of 2%, and you cannot claim credit without a PAN, so the deduction is effectively lost to you.

Summary

TDS on commission is 2% withheld before payment and deposited against your PAN, under what was Section 194H and is now Section 393(1) from 1 April 2026. It applies once your commission from a payer crosses ₹20,000 in the year, rises to 20% without a valid PAN, and is fully recoverable when you file your return. Check Form 26AS before filing, and file even on small income, because that is the only way the money comes back. If you want the rates behind the payouts themselves, DSA commission structures sets those out separately.

Disclosures

GroMo (Vitrak Technologies Pvt Ltd) is a distribution platform. GroMo is not a bank, NBFC, insurer or investment adviser. All products are offered by their respective RBI, IRDAI or SEBI-regulated providers.

Partner earnings depend on effort, product mix and customer eligibility. Any figures shown are illustrative examples of individual results. They are not typical and are not guaranteed. GroMo does not guarantee any level of income.

Tax disclaimer. This article is general information about how TDS on commission works. It is not tax advice, and it is not a substitute for professional guidance on your own circumstances. Tax rates, thresholds, section numbers and return requirements change with each Finance Act and with CBDT notifications issued during the year. Every figure here carries the date on which it was checked. GroMo does not compute, advise on or accept responsibility for your tax position. For your own filing, deduction or refund, verify the current rules on the Income Tax Department portal at incometax.gov.in or consult a qualified chartered accountant or tax practitioner.

Nothing in this article should be read as a statement of what you personally will owe or receive. Individual liability depends on total income, residency, deductions claimed and the regime chosen.

Written by Arvind Kumar. Published 9 October 2026. Last updated 9 October 2026. Sources listed below.

Sources

1. TDSMAN, TDS & TCS Rate Chart, Tax Year 2026-27, updated 21 May 2026. Entry 1006: commission or brokerage (other than insurance), old Section 194H, new Section 393(1), rate 2%, threshold ₹20,000. Retrieved 9 October 2026. https://www.tdsman.com/downloads/TDS_and_TCS-rate-chart-2027.pdf
2. Finance (No. 2) Act, 2024 — reduction of the commission and brokerage TDS rate from 5% to 2% with effect from 1 October 2024.
3. Income-tax Act, 2025, Section 393(1) — successor provision to Section 194H of the Income-tax Act, 1961, for payments from 1 April 2026.
4. Income Tax Department e-filing portal — Form 26AS and Form 16A. https://www.incometax.gov.in/