income from insurance commssion
This query is : Resolved
13 July 2010
is expenditure allowable against insurance commission to insurance advisior ? if allowed to what is maximum percenet against such income ?
13 July 2010
If your income is only from Insurance Commission or more than Rs.60000/ in a year, then you have to shown it Business income and claim expenses . There is percentage. But it is better to shown net income 15% of total receipt.
IF you are earning insurance commisison as other sources and it is below Rs.60000 in a year then you can shown it Income from other source and claim fixed % of expense as below.
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.
IF you are earning insurance commisison as other sources and it is below Rs.60000 in a year then you can shown it Income from other source and claim fixed % of expense as below.
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.
13 July 2010
sir ,ok so we can claim 15%of net income on total commission received and claim refund from tds deducted
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