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Ch.6 · Distributor Commission Structure · medium

What is the TDS rate applicable on mutual fund distributor commission under Section 194H?

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EXPLANATION

TDS under Section 194H is deducted at 5% on commission or brokerage payments (including mutual fund distributor commission) exceeding ₹15,000 in a financial year. AMCs deduct TDS before crediting commission to the distributor's bank account.

A.2%

B.5% [✓ Correct]

C.10%

D.20%

EXPLANATION

TDS under Section 194H is deducted at 5% on commission or brokerage payments (including mutual fund distributor commission) exceeding ₹15,000 in a financial year. AMCs deduct TDS before crediting commission to the distributor's bank account.

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