Income taxable in which head
This query is : Resolved
20 March 2012
Sir,
I have a corporate Agency of Life Insurance and TDS deducted by company on my commission.I want to know commission on Insurance business taxable in which tax head and how much expense should be exempt for my bye petrol + telephone expense etc.
and further which ITR suitable to me for Salary Income + Income for other sources + insurance commission income.
I have a corporate Agency of Life Insurance and TDS deducted by company on my commission.I want to know commission on Insurance business taxable in which tax head and how much expense should be exempt for my bye petrol + telephone expense etc.
and further which ITR suitable to me for Salary Income + Income for other sources + insurance commission income.
20 March 2012
ITS BUSINESS INCOME
USE ITR-4
CA MANOJ GUPTA
JODHPUR
09828510543
USE ITR-4
CA MANOJ GUPTA
JODHPUR
09828510543
Message likes :
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21 March 2012
Sir,
First of all many thanks for reply but my insurance commission is like normal agent commission deduction made @10% for TDS and I have not any office for this purpose I wish to show this income in other sources like LIC Agent member is it possible.
my agency is only corporate channel of company that is why I call corporate agent otherwise no any difference between normal agent or me.
First of all many thanks for reply but my insurance commission is like normal agent commission deduction made @10% for TDS and I have not any office for this purpose I wish to show this income in other sources like LIC Agent member is it possible.
my agency is only corporate channel of company that is why I call corporate agent otherwise no any difference between normal agent or me.
01 August 2024
Here's how to handle the income from insurance commission, the appropriate ITR form, and the expenses related to your agency:
### **1. Income Tax Head for Insurance Commission**
- **Insurance Commission Income**: As a corporate agent, the commission you earn from insurance business should be classified under "Income from Business or Profession" and not "Income from Other Sources." This is because insurance commission is earned through the conduct of your business activities, even if it is a corporate agency.
### **2. Expense Deduction**
- **Business Expenses**: You can claim expenses related to your business under "Income from Business or Profession." These expenses typically include:
- **Telephone Bills**: You can claim a portion of the telephone bills if they are used for business purposes.
- **Travel Expenses**: Petrol and travel expenses can be claimed if they are directly related to your business activities.
- **Office Expenses**: Even if you do not have a physical office, expenses like stationery, business-related subscriptions, and other miscellaneous expenses can be claimed.
- **Expense Documentation**: Maintain proper documentation for all business-related expenses. This includes receipts, invoices, and a clear record of how these expenses are related to earning your commission income.
### **3. ITR Form Selection**
- **Suitable ITR Form**: For an individual with:
- Salary income
- Income from other sources
- Insurance commission income (as business income)
The most suitable ITR form is **ITR-3**.
**ITR-3** is used for individuals who have income from:
- Salary or pension
- Income from a business or profession (including insurance commission)
- Income from other sources (like interest income)
### **4. Key Points for Filing ITR-3**
- **Income from Salary**: Report your salary income in the appropriate section.
- **Income from Business/Profession**: Report the insurance commission income under "Business or Profession" and include details of business expenses.
- **Income from Other Sources**: Report any other sources of income such as interest income here.
### **Steps to File ITR-3**
1. **Download ITR-3 Form**: You can download the ITR-3 form from the [Income Tax Department's e-filing website](https://www.incometax.gov.in/).
2. **Fill in the Form**:
- **Part A**: Fill in your personal information and income details.
- **Part B**: Report income from salary, business/profession (insurance commission), and other sources.
- **Schedule P&L**: Detail your business income and expenses related to your insurance commission.
- **Schedule BP**: Include any additional business/profession income details.
- **Schedule OS**: List out other sources of income if applicable.
3. **Verify and Submit**: After filling out the form, review all details for accuracy, submit the form electronically, and verify your return as required (through e-verification or sending the signed physical copy).
### **Additional Notes**
- **Corporate Agency vs. Normal Agent**: Since you operate as a corporate agent, the treatment of your income for tax purposes remains consistent with that of a business income. The key difference in filing would be to ensure that you are using the ITR-3 form and treating the income under the correct head.
By following these steps, you should be able to accurately report your insurance commission income, claim relevant expenses, and file your return using the appropriate ITR form.
### **1. Income Tax Head for Insurance Commission**
- **Insurance Commission Income**: As a corporate agent, the commission you earn from insurance business should be classified under "Income from Business or Profession" and not "Income from Other Sources." This is because insurance commission is earned through the conduct of your business activities, even if it is a corporate agency.
### **2. Expense Deduction**
- **Business Expenses**: You can claim expenses related to your business under "Income from Business or Profession." These expenses typically include:
- **Telephone Bills**: You can claim a portion of the telephone bills if they are used for business purposes.
- **Travel Expenses**: Petrol and travel expenses can be claimed if they are directly related to your business activities.
- **Office Expenses**: Even if you do not have a physical office, expenses like stationery, business-related subscriptions, and other miscellaneous expenses can be claimed.
- **Expense Documentation**: Maintain proper documentation for all business-related expenses. This includes receipts, invoices, and a clear record of how these expenses are related to earning your commission income.
### **3. ITR Form Selection**
- **Suitable ITR Form**: For an individual with:
- Salary income
- Income from other sources
- Insurance commission income (as business income)
The most suitable ITR form is **ITR-3**.
**ITR-3** is used for individuals who have income from:
- Salary or pension
- Income from a business or profession (including insurance commission)
- Income from other sources (like interest income)
### **4. Key Points for Filing ITR-3**
- **Income from Salary**: Report your salary income in the appropriate section.
- **Income from Business/Profession**: Report the insurance commission income under "Business or Profession" and include details of business expenses.
- **Income from Other Sources**: Report any other sources of income such as interest income here.
### **Steps to File ITR-3**
1. **Download ITR-3 Form**: You can download the ITR-3 form from the [Income Tax Department's e-filing website](https://www.incometax.gov.in/).
2. **Fill in the Form**:
- **Part A**: Fill in your personal information and income details.
- **Part B**: Report income from salary, business/profession (insurance commission), and other sources.
- **Schedule P&L**: Detail your business income and expenses related to your insurance commission.
- **Schedule BP**: Include any additional business/profession income details.
- **Schedule OS**: List out other sources of income if applicable.
3. **Verify and Submit**: After filling out the form, review all details for accuracy, submit the form electronically, and verify your return as required (through e-verification or sending the signed physical copy).
### **Additional Notes**
- **Corporate Agency vs. Normal Agent**: Since you operate as a corporate agent, the treatment of your income for tax purposes remains consistent with that of a business income. The key difference in filing would be to ensure that you are using the ITR-3 form and treating the income under the correct head.
By following these steps, you should be able to accurately report your insurance commission income, claim relevant expenses, and file your return using the appropriate ITR form.
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