Income of agents (standard expenses claim)

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Vimal Khatri (Querist)

25 July 2018 Dear Sir/Madam,
my client is a insurance commission agent, and his total commission income is less than 60000/-. Kindly tell me which ITR Form Should I select for F.Y. 2017-18 (A.Y. 2018-19). Please also tell me the section under which insurance commission income is to be taken.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

25 July 2018 1. Form ITR-1

2. For admissible deductions please see the link https://www.incometaxindia.gov.in/Communications/Circular/910110000000000549.htm

Vimal Khatri

Vimal Khatri (Querist)

25 July 2018 Sir,
With due respect I would like to say that I have a doubt that ITR 1 would be appropriate or not. my client is also having Income from Other Sources. LIC has also deducted TDS U/s 194D

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

31 July 2024 For an insurance commission agent with total commission income less than ₹60,000 for the Financial Year (FY) 2017-18 (Assessment Year 2018-19), here’s how you should handle the income and select the appropriate Income Tax Return (ITR) form:

### **1. ITR Form Selection**

**For FY 2017-18 (AY 2018-19):**

- **ITR 1 (Sahaj):**
- **Eligibility:** ITR 1 is typically used by individuals who have income from:
- Salary or Pension
- Income from One House Property
- Other Sources (including interest income)
- Agricultural Income up to ₹5,000
- **Ineligibility for ITR 1:** ITR 1 is **not suitable** if:
- The taxpayer has income from **business or profession** (which includes insurance commission).
- The taxpayer has income from **capital gains** or **foreign assets**.

Since the insurance commission income falls under the category of income from a profession or business, and not under the categories eligible for ITR 1, this form would **not be appropriate**.

- **ITR 4 (Sugam):**
- **Eligibility:** ITR 4 is suitable for:
- Individuals, Hindu Undivided Families (HUFs), and firms (other than LLP) having income from a profession or business under the presumptive taxation scheme.
- Taxpayers who have income from business or profession and income from other sources.
- **Inclusion:** It includes income from professions, such as insurance commission agents.

### **2. Section for Insurance Commission Income**

**Insurance Commission Income:**

- **Taxable Under Section 28:** Insurance commission is considered income from a profession and is taxable under **Section 28** of the Income Tax Act. This section covers the income from business or profession.

### **3. TDS on Insurance Commission**

- **TDS Deduction:**
- Under **Section 194D**, TDS is deducted on insurance commission income. If TDS has been deducted, it should be reflected in **Form 26AS** and can be claimed as a credit while filing the return.

### **4. Reporting Income and Deductions**

- **ITR 4:**
- **Income Reporting:** Report the insurance commission income under the section for income from profession or business.
- **Other Sources:** Report any additional income from other sources as well.
- **Deductions:** Claim any allowable deductions under Section 37(1) or other relevant sections if applicable.

### **Summary**

- **ITR Form:** For an insurance commission agent with total commission income under ₹60,000 and income from other sources, the appropriate form is **ITR 4 (Sugam)**.
- **Section for Insurance Commission:** Report the income under **Section 28**.
- **TDS Credit:** Verify TDS credit under **Section 194D** and ensure it is correctly reflected in the return.

**In conclusion**, use **ITR 4** to file the return and include all relevant income and deductions as required. Ensure that you accurately report the insurance commission income and other sources of income, and account for any TDS deducted.

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