Refund for lic d.o.

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This query is : Resolved

Dipak Gulhane (Querist)

13 May 2012 MY CLIENT IS LIC DEVELOPEMENT OFFICER....HE IS GETTING SALARY AROUND 15 LACKS & ALSO GET INCENTIVE OF AROUND 5,00,000 FOR RECRUTING PROSEPCTIVE LIC AGENT.....HE GOT INCETIVE AS A PART OF SALART.....HIS TDS IS AROUND 5,00,000...CAN HE CLAIM EXPENSES FOR THE RECRUTEMENT OF LIC...CAN GE GET HIS SOME OF HISTDS AS REFUND BY CLAIMING EXPENSES FOR RECRUTING AGENTS SINCE HE ACTUALLY INCURRED EXPENSES FOR THE SAME....?

CA.Vinita Gupta

CA.Vinita Gupta (Expert)

13 May 2012 Salary as well as Incentive is Taxable under the Head Income from Salaries. He cannot claim deduction of any expenses

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

13 May 2012 For claiming an allowance exempt U/s 10(14)
the D O should have provided such details to the employer. While preparing Form 16, if the employer takes care of granting deductions to the DOs, I think, department
may not object.
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Unfortunately, LIC is not granting any deductions against the Allowances ( it is taking the full allowance as taxable) while preparing Form 16 of the employee, whereas being an employer, and known as a better informed person about the employees' business expenditure for itself-... than the tax department, it can allow such deductions U/s 10(14).
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DOs can better be advised- to make representation first to their employer. Income Tax law restricts such claims by DO
only on this possible ground.
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If you want to claim, chances are there, that in future, While verifying the Employers TDS statements or other particulars about the employee, recovery may be made from such DOs, against the refund granted against such claims. Such exercise may be non remunerative or expensive than the expenditure claimed as incurred.
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Dipak Gulhane

Dipak Gulhane (Querist)

13 May 2012 Suppose I wish to claim such expenses u/s 10(14)then whats is d possibilities that AO May take action..whether he will impose nay penalty...for claiming such expenses.....also in ITR-1 where I can make such claim...?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

13 May 2012 Technically speaking DO is an employee of LIC and when LIC itself do not allow such expenditure, the entire amount should be treated as part of salary.

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Dipak Gulhane

Dipak Gulhane (Querist)

14 May 2012 BUT WILL THERE BE ANY PENALY IF I DTAKE IT AS EXP.