Computation of Income for LIC development officers

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BPAst (Querist)
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06 August 2010 I want to know how to compute income under the income tax act of LIC DEV. Off. as they get income as salary including the bonus, commn etc. for the business done under them.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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06 August 2010 if HE IS IN EMPLOYEMENT UNDER LIC THEN ALL RECEIPTS SALARY , BONUS, COMMISSION WILL BE PART OF SALARY.

Salary" is the remuneration received by or accruing periodically to an individual for service rendered as a result of expressed or implied contract.

Compensation or remuneration even in the following circumstances is chargeable to Income-tax under the head 'Salaries': -

a) When due from the former employer or present employer in the previous year, whether paid or not.

b) When paid or allowed in the previous year, by or on behalf of a former employer or present employer, though not due or before it becomes due.

c) When arrears of salary are paid in the previous year by or on behalf of a former employer or present employer, if not charged to tax in the period to which it relates.

It is, therefore, clear that apart from current years salary, even advance salary and/or arrears of salary may be taxed in the year of receipt. More specifically and elaborately, the Income-tax Act has stipulated that salary includes :-

a) Salary, including advance/arrears of salary;

b) Wages;

c) Fees;

d) Commission;

e) Pension;

f) Annuity;

g) Perquisite;

Receipts from Provident Fund chargeable to tax; Profit in lieu of or in addition to salary or wages; Gratuity;

Contribution of employer to Recognised Provident Fund in excess of prescribed limit; Interest on credit balance of Recognised Provident Fund in excess of notified rates;

i) Encashment of leave.

definition of 'salary' is inclusive and not exclusive.

BPAst

BPAst (Querist)
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06 August 2010 I do agree with u sir & thank u for giving quick reply. But as the bonus is paid to them for the business made & the same is paid under seperate statute or so. & as per the MOU between LIC & CBDT, the LIC DEV. off. are allowed exps up to 30% of the bonus etc., recd. by them. so can u please clarify in this regard.
particularly i need whether it is a adhoc deduction or do the LICDO have maintain books for the purpose or is it allowed u/s. 10(14) of the act.
Thanks, with regards.

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CA. Pradeep Nayak

CA. Pradeep Nayak (Expert)
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10 August 2010 Mr. Bansal has rightly answered this. As the development officer is an employee of LIC, all will be taxed as salary.

No deductions will be allowed other than those allowable on salary. Also there is no need to maintain any books.

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