Dalal
Broker, commission agent
A dalal is a broker who brings buyers and sellers together in a trade such as yarn or cloth and is paid brokerage on the deals that result.
In Indian textile markets a large share of deals arrive through dalals. They bring the customer, often vouch for that customer's ability to pay, and sometimes chase the payment. Their brokerage is usually settled periodically rather than deal by deal — which is how it ends up in a separate notebook rather than in the books.
Brokerage is quoted differently in different markets and for different goods: as a percentage of the invoice value, as rupees per kilogram, or as rupees per bag or bale. One trader may deal with dalals on all three, so a ledger that understands only a percentage misprices the rest.
Brokerage paid to a resident is subject to TDS under section 194H of the Income-tax Act, 1961 once the year's total to that person crosses the threshold: 2% from 1 October 2024 (it was 5%), on amounts above ₹20,000 in a financial year from 1 April 2025 (it was ₹15,000). Whether a payer must deduct at all depends on the payer — an individual or HUF deducts only if their business turnover crossed the tax-audit limit in the previous year. The Income-tax Act, 2025, in force from 1 April 2026, carries TDS in its own section; confirm the current citation with your CA.
Key facts
- Brokerage bases in use: % of invoice value, ₹ per kg, ₹ per bag or bale.
- TDS on brokerage: s.194H, 2% from 1 October 2024 (previously 5%).
- Threshold: ₹20,000 per payee per financial year from 1 April 2025 (previously ₹15,000).
- Without a PAN: s.206AA, the higher of 20% or the applicable rate.
Who this affects
Yarn and textile traders, and any wholesaler whose sales come through brokers.
How YarnTally handles it
The dalal ledger (every plan) takes brokerage in all three conventions, as an optional dalal on a sale or a purchase order. Brokerage is computed per deal from the saved sale rather than stored, and a deal whose brokerage cannot be computed says so. Payouts carry a TDS suggestion from dated, editable rates; statements are printable; and each dalal's page shows the customers they introduced, how many cheques those customers bounced and what they still owe.
See what else it doesReviewed September 2026. This is general information about how these rules work, not tax or legal advice, and thresholds and due dates do change. Check your own position with your chartered accountant before acting on it.