21 July 2010
Insurance Agent Advisors have to file ITR-4. as business income. As per Section 44AA books of accounts have to be maintained if receipts exceed 60000 per annum. Even if you do not show any expenses and offer the entire receipt (including the amount of TDS) as your taxable income, you can simply make a books of account showing receipts as income. Designate a specific account for receipt of commission cheques and transfer rest of the money to your regular savings bank account leaving only your minimum balance. In ITR 4, your balance sheet will show capital invested in business as the minimum balance in your account and your assets will be just this bank balance. Your entire receipt will be your business income. If you are more organised and have larger business and this is your continuous occupation, you can write books of account and claim expenses like telephone, conveyance, couriers, depreciation on computers and vehicle used for business, rent for business premises if you have an office etc. It is healthy to do this if your receipts are large.
However, if your foray into insurance business is just time pass or some sales manager of insurance company has talked you into joining only to dry you up of all your contacts and sell whatever is possible, chances are you may not be in the insurance business for long. In this case I suggest you simply offer all your gross commission amount (including the TDS) as income from other sources in Form ITR 2 as suggested by CMA Ramesh Krishnan and claim credit of TDS. If applicable refund will be granted to you.
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