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

Ask the Community Income Tax
1

Hi,

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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