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Deduction u/s 57 for LIC agents

Divya K S (CA) (289 Points)

28 January 2010

Hi everyone,

Is there any deduction u/s 57 of Income Tax Act, 1961 for Income earned by LIC agent as income from other sources. If, yes, please send me the reference/circular/caselaw.

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12 Replies

Amir (Learner) (4016 Points)
Replied 28 January 2010

Dear Divya,

Ad hoc deduction to insurance agents -

The benefit of ad hoc deduction to Insurance agents of the Life Insurance Corporation having total commission (including first year commission, renewal commission and bonus commission) of less than Rs. 60,000 for the year, and not maintaining detailed accounts for the expenses incurred by them, may be allowed as follows :
(i) where separate figures of first year and renewal commission are available, 50 per cent of first year commission and 15 per cent of the renewal commission;
(ii) where separate figures as above are not available, 331/3 per cent of the gross commission.
In both the above cases, the ad hoc deduction will be subject to a ceiling limit of Rs. 20,000.
The “gross commission” in (ii) above will include first year as well as renewal commission but will exclude bonus commission.
The complete amount of bonus commission is taxable and will be taken into account for purpose of computing the total income, and no ad hoc deduction will be allowed from this amount.
The benefit of ad hoc deduction will not be available to agents who have earned total commission of more than Rs. 60,000 during the year. The admissibility of the expenditure claimed by such agents will be decided by the Assessing Officers as per the provisions of the Income-tax Act.
—Circular : No. 648, dated 30-3-1993.

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Divya K S (CA) (289 Points)
Replied 28 January 2010

Thnx a lot..

Ajay Garg (CA FINAL) (101 Points)
Replied 18 July 2010

please tell me which itr will be filed for such insurance agent and where the details of first commission, renewal commission etc will be filled. also tell me about if commission is more than Rs. 60000/-

(Guest)

ITR 4 will have to File for Insurance Comission and Insurance Commision is More than 60000 then Actual Expenditure have To Claim

1 Like

Sharad (Professional) (73 Points)
Replied 01 June 2011

Dear all

The LIC agent is working from Home which is owned by mother of the LIC agent.

Now while computing taxable income of this agent (commission is more than Rs. 60000) can Electricity, Telephone and society bills paid from the agent's account claimed as actual expenditure incurred.

Please guide.

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PRAVIN (PROPRIETOR) (21 Points)
Replied 08 July 2011

If Home is owned by LIC agent's mother, the agent can claim the expeneses as he is working from home and those expenses can be taken as expenses earned for generation of the income...so he can claim the expenses proportinatly related to his work.