Commission on insurance

This query is : Resolved

POOJA (Querist)
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13 March 2014 Dear sir,

please tell me under which head we have to show commission on insurance?(income from other sources or business income)and whether we can deduct 40% on income to consider expenses incurred for insurance business?

thank you

Amol S Joglekar

Amol S Joglekar (Expert)
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13 March 2014 Choice is with the assessee. If the commission is major ingrediant of income, show it under "income from business or profession" , else "income from other sources." As per the administrative circular of CBDT, 40 % can be claimed on adhoc basis.

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Sandeep Dharar

Sandeep Dharar (Expert)
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13 March 2014 If the main source of income is commission then show it as business income, otherwise IFOS.40% can b claimed on ashoc basis....

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POOJA

POOJA (Querist)
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13 March 2014 whether i have to consider 40% adhoc on total commission received?

Amol S Joglekar

Amol S Joglekar (Expert)
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13 March 2014 What is the amount of commission? Refer the circular.....it gives some limit..... If your commission is below the said limit, you can apply the ad hoc deduction.

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POOJA

POOJA (Querist)
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13 March 2014 the limit is for 60,000.if it crosses 60,000 then also they can claim the expenses(adhoc)?

Amol S Joglekar

Amol S Joglekar (Expert)
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13 March 2014 Books of accounts be maintained, if the amount of commission exceeds the limit. (Of course 40% can be considered as the "thumb rule", in that case as well....)

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