Employee's sales commission or incentive on the business for tax


When employee is paid sales commission or incentive on the business created. How should this commission or incentive be treated under tax heads?

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All basic salaries along with commissions and bonusses are liable to taxation. Check out the article

e.g. Commission Income is Taxed at the rate of 5% of the total amount received as per Section 194 H of the Income Tax Act. An amount of Rs. 5,000 paid as commission income will lead to a Tax of Rs. 250 which will be deducted by the employer/paying individual. So the person receiving the commission will get Rs. 4,750 after deduction of Commission Income Tax.

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