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LIC Agent's Commission

PUNEET GUPTA 9780822635 (B.COM CA FINAL STUDENT BATHINDA) (58 Points)

14 January 2010

Can Anybody tell me Under which head LIC Agent's Commission Income Will be taxable. & What will be the deduction regarding this income.

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11 Replies

Vivek (Finally passed CA Final...!!!!!) (1097 Points)
Replied 14 January 2010

Chargeable under either Business or profession or Income from other source

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CA Pramod Jain (manager finance) (1577 Points)
Replied 14 January 2010

can be charged under business or profession head

Shriti Daga (Chartered Accountant) (102 Points)
Replied 14 January 2010

ya it depends it can be charged either in business and profession or income from other source if main business of assessee is something else

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ashish gupta ( student) (1922 Points)
Replied 14 January 2010

U can claim the expenses like travelimg, telephone, stationery nd entertainment and show this under business or other sources if its not the main business of the assessee.

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Shriti Daga (Chartered Accountant) (102 Points)
Replied 14 January 2010

ya it depends it can be charged either in business and profession or income from other source if main business of assessee is something else

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Amir (Learner) (4016 Points)
Replied 14 January 2010

Dear Puneet,

As rightly said by all-

U can show under PGBP if it is the main or wholse sole source of ur earning...Otherwise Othersources............

Regarding Expenses

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.

This will apply to assessment year 1993-94 and subsequent years—Circular : No. 648, dated 30-3-1993.

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manish (Article Assitant) (358 Points)
Replied 14 January 2010

Commission received as an agent which generate from as a business or profession so it is taxable under head PGBP. Any commission recieved as other income then it is taxable under head other source of income