31 May 2011
But ICAI guidelines says Insurance agency can be classied as 'business' and not profession for the purpose of section 44AB of the Income tax Act,1961.
01 June 2011
1. LIC agency is treated as business. (Section 44AA) 2. It is also covered in the definition of "eligible business" (Section 44AD) 3. The person carrying on this business is an individual so it is an "eligible" assessee also. (Section 44AD) 4.The commission amount is nothing but gross receipts, and "Gross Receipt" is one of the criteria of percentage basis presumptive income. 5. The intention of the Government is clear that it desires to give relaxation to small assessees from maintaining books of accounts.
6. The circular No 648 of dt .30-03-1993 is in respect to LIC Commission Income below Rs. 60000/-. 7. The requirement to maintain books of account U/s 44AD is done away.
8. It can be concluded from all the above points that LIC Agency business can be covered under section 44AD where one can show 8% or more of the commission income as profit.
9. It is worth to study "Critical analysis of section 44AD" an Article by PINKESH JAIN on 08 March 2011 on CA Club India - https://www.caclubindia.com/mobile/articles/critical-analysis-of-section-44ad-9048.asp
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