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Insurance agent commission?

07 June 2011

DEAR sir, our client lic agent she recd. income 273297/- tds amt - 3825/- under 80c claim tution fees 13700, lic policy premium amt. 25000 /- (housing loan she husband exemtion claimed)

TOTAL INCOME : 273297.00

FEMALE DEDUCTION : 190000.00

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(-) 83297.00

80C DEDUCTION :

TUTION FEES : 13700.00

LIC PREMIUM : 25000.00

MOBILE CHARGES : 7200. 00 (600 PM * 12)

POSTAGE AND STAMPS : 1020.00 ( 85 PM *12)

TRAVELLING EXPENSES : 17064 .00 (1422 pm * 1 YEAR)

PRINTING AND STATIONERY: 5316.00 (443 * PM *1 YEAR

GENERAL EXP. : 13997. 00 (1166 PER MONTH * 1 YEAR )

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BAL - : NIL

PLS. SUGGESSTION MY CALCULATION CORRECT OR NOT ?

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7 Replies

pankaj (Senior Audit Assisstant) (28 Points)
Replied 07 June 2011

dear sir your calculation is not correct as per income tax act

since under section 80c deduction there is not allowed expenses which u claimed as

mobile expenses or

travelling expenses or

POSTAGE AND STAMPS or

PRINTING AND STATIONERY:

GENERAL EXP. :

in this case only tution fees and lic premium cover for claiming deduction u\s 80c

as per given data income calculation is

TOTAL INCOME : 273297

(-) 80C DEDUCTION :

TUTION FEES : 13700.00

LIC PREMIUM : 25000.00 38700

...............

total taxable income 234597

......................

tax calculation on income rs 234597 4460

tds deducted 3825

.................

tax payable 635

..................

this calculation is based on data u provided

there is no vifercation of commission income or any other income

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AUDITOR VINOTHKUMAR (a) (875 Points)
Replied 07 June 2011

SORRY SIR, TDS AMT. 30825/-

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 07 June 2011

Comission income of LIC agents is PGBP, hence all expenses paid or incurred in connection to LIC business should be allowed in computing Net profit of the business.

LIC commission income .........273297 ( if tds is included in this amount then ok, otherwise TDS would get added in in this amount)

Bank Interest ..............................

-----------------------------------------------------

Total Income ................................................

Less Expenses claimed in PGBP

Bank Charges

Business Promotion

Telephone and Fax

Printing & Stationary

Travelling

------------------------------------------

Net Profit .......................................

Less

80C Deduction

Tution Fees

(Check fees book, only "tution fees" heading is allowed for any recognized school, for her children only (max two )"

LIC Premia

( check the sum assured is not less then 5 times of premium paid)

=============================================

Net Taxable income

( after such deductions ...net taxable income would come below taxable limit)

Tax there on .................................NIL

TDS 30825

Tax paid .NIL

Tax payable (Refundable) ..........................(30825)

AUDITOR VINOTHKUMAR (a) (875 Points)
Replied 07 June 2011

lots of thanks

chetan (accountant) (321 Points)
Replied 07 June 2011

Mr. U S SHARMA

Pls give me ur suggestion on your above comments. can we treat it is as business income and we claim theese expenses. and it is applicable only for lic agents or it is applicable to all (i.e. icici insurance agents or other )

what is PGBP?