ITR Filing
This query is : Open
03 July 2011
Insurance commission earned Rs. 350000 TDS is deducted u/s 194D. No expenses are claimed. Can I file ITR-4S in such a situation?
U S Sharma
(Expert)
04 July 2011
if there is no other business activity then ITR4s can be used.
Mayur Agrawal
(Expert)
04 July 2011
Sharma ji,
I think.. if there is other business also then ITR4S can be used
I think.. if there is other business also then ITR4S can be used
CA. Krishna K Neeraj
(Expert)
04 July 2011
ITR 4S is for presumptive business income tax .
I think if you are diclosing your income at 8% of gross commission receipt then you can file ITR 4S otherwise you should file ITR 4.
I think if you are diclosing your income at 8% of gross commission receipt then you can file ITR 4S otherwise you should file ITR 4.
Mayur Agrawal
(Expert)
04 July 2011
Under Section 44AD income should be minimum 8% of turnover. assessee can show higher income upto 100%.
04 July 2011
A sum representing 40 per cent of the gross receipts from such commission should normally be allowed as deduction in assessing such commission income. Letter : F. No. 8/2/68-IT (A-I), dated 18-10-1968. 469. There is a circular for the same if total commission does not exceed Rs. 60,000/-.
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 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.
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 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.
Mayur Agrawal
(Expert)
04 July 2011
Agrawal sir,
Firstly, This circular is applicable only for commission income upto Rs. 60000. it does not talks about commission income more than Rs. 60000.
Second, Subsequent amendment in the act must prevail over old circulars.
Old circulars can not overrides amendment in the act.
and third, If there is any ambiguity, benefit should be given to the assessee.
So In my view, Insurance commission income should be covered under sec. 44AD.
I want some more discussion from other experts on this issue. So I am leaving it open.
Firstly, This circular is applicable only for commission income upto Rs. 60000. it does not talks about commission income more than Rs. 60000.
Second, Subsequent amendment in the act must prevail over old circulars.
Old circulars can not overrides amendment in the act.
and third, If there is any ambiguity, benefit should be given to the assessee.
So In my view, Insurance commission income should be covered under sec. 44AD.
I want some more discussion from other experts on this issue. So I am leaving it open.
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