1. What is Commission Tax in India?

Commission tax in India refers to the tax deducted at source (TDS) or payable on commission income earned by individuals or businesses. The rate varies depending on the nature of the commission and the tax laws applicable.

2. How Does the Calculator Work?

The calculator uses the simple commission tax formula:

Where:

• \( Commission \) — Amount earned as commission (INR)
• \( India\ Tax\ Rate \) — Applicable tax rate percentage

Explanation: The calculation multiplies the commission amount by the tax rate (expressed as a percentage) to determine the tax liability.

3. Importance of Commission Tax Calculation

Details: Accurate commission tax calculation helps in proper financial planning, ensures compliance with Indian tax laws, and helps avoid penalties for underpayment of taxes.

4. Using the Calculator

Tips: Enter commission amount in INR and the applicable tax rate in percentage. Both values must be valid positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the standard TDS rate on commission in India?
A: Typically 5-10% under Section 194H of Income Tax Act, but rates may vary based on recipient status and other factors.

Q2: Is commission considered business income or salary?
A: It depends on the nature of work. Commission to employees is salary income, while to agents/brokers it's business income.

Q3: Are there exemptions for commission income?
A: Yes, certain thresholds and exemptions apply. For FY 2023-24, basic exemption limit is ₹2.5 lakh for individuals below 60.

Q4: When should commission tax be paid?
A: TDS should be deducted at payment time and deposited with government by 7th of next month.

Q5: Can I claim expenses against commission income?
A: If commission is business income, related expenses can be deducted. For salary income, standard deduction applies.