Applicability of TDS provision u/s 194H

[A RAVINDRA]

The dealer has provided the option of credit payment to its customers.Dealer get the proceeds from bank after the deduction of commission at agreed rate on credit card swipings. I would like to know whether TDS provision u/s 194H is applicable.

AI Summary

Does TDS Apply on Credit Card Commission? Section 194H Clarifies Dealer Obligations for Online Payment Gateways. A query was raised regarding the applicability of the Tax Deducted at Source (TDS) provision under section 194H of the Income Tax Act concerning commission on credit card transactions. A dealer receives payments from a bank after a commission is deducted for credit card swipes. The response clarified that if the transaction falls under the definition of commission or brokerage as per Explanation (i) of section 194H, the dealer must deduct TDS on the commission paid to the online payment gateway.