ITR AY 2018-19

File ITR 2 with commission income under 'IFOS'

Yes, My Dear, your doubt is genuine ......

But here it is not commission or brokerage of business nature (TDS u/s. 194H)

He is salaried person, and LIC commission (TDS u/s 194D) can be his side income, but not business income. So, looking at its nature of activity, he can offer to assess the income under IFOS.

In case of query generated by system, it can be replied that the income has been offered for assessment under...... other head.

Generally.. upto Rs.60,000/- commission income, no books to be maintained.....

Circular : No. 648, dated 30-3-1993.

462. Whether benefit of ad hoc deduction to insurance agents of LIC, 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 expenses incurred by them, may be allowed

1. The Board in F. No. 14/9/65-IT(A-I), dated 22-9-1965 (Annex I), as subsequently modified in Instruction No. 1546, dated 6-1-1984 (Annex II), had granted, subject to conditions therein specified, the benefit of ad hoc deduction in respect of the expenses incurred by agents of the Life Insurance Corporation.

2. In supersession of the above Circular and Instruction, the Board have decided that 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.

3. The gross commission in (ii) above will include first year as well as renewal commission but will exclude bonus commission.

4. The complete amount of bonus commission is taxable and will be taken into account for purposes of computing the total income, and no ad hocdeduction will be allowed from this amount.

5. 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.

6. This will apply to assessment year 1993-94 and subsequent years.