Commission on LIC Premium

He can claim deduction of expenses on adhoc @ 50% on first year commission or 15% on the renewal insurance commission as per Circular No 648 dated 30.03.93. In case, separate figures of commission for new and renewed policies are not available in that case the claim of expenses can be made at a percentage of 33 1/3 % as given in the said circular. However, the circular is applicable in case the commission is upto 60000/-.

My name is B S PATIL

I work for lic as dev officer in Fort br Mumbai

i am looking for chartered accountants who may be intrested in starting career as insurance consultants

pl contact me at

B S PATIL

LICDEV OFFICER

FORT MUMBAI 400001

9820084635

DEAR MR AHUJA

THANKS FOR YOUR ADVICE. I GOT THE CIRCULAR YOU HAVE MENTIONED

AS PER CIRCULAR NO 594 dated 27.02.91 THE 50% ADHOC DEDUCTION IS NOT APPLICABLE ON INSURANCE COMMISSION, PLEASE CHECK IT AT YOUR END.

AS MY FRIEND EARNED COMMISSION ON POLICIES OF LIFE INSURANCE

PLEASE ADVICE

REGARDS

RAJESH

Commission received by LIC agents or other agents of LI companies ,can claim exemption on the First year commission to the extent of 50% provide the total commsion is with in 60,000/=. In your case the total commission earned is Rs. 75000/= , so that it is not applicable to you. But you can prepare a I / E a/c and show your expenses for earning the commission and the net income can be taken as your Income .

Dear Mr. Rajesh,

I had mistakenly mentioned the circular no as 594 instead of 648 and I have accordingly modified my earlier reply. In the instant case the commission amount is 75000/- as such the said circular is not applicable and the expenses incurred actually may be claimed out of the commission earned from the insurance business.

Thanks Mr Ahuja

Dear Mr Ahuja

Please advice that if  account of commission  received is maintain in proper way as required in the said circular, what will be the exemption.

Thanks

Rajesh

The requirement for maintenance of books as per section 44AA is not required in case receipt is less than 10lac and the  income is also less than Rs1.2 lac. However, the said circular is not applicable In case commission received is more than Rs 60,000/- .   To justify the claim for actual expenses, the accounts are supposed to be maintained.  The expenses can be claimed and sustantiated from the books of accounts.

Is service tax deducted on insurance commission also an expense?

Dear Sir

I am an insurance agent/advisor in a private insurance company. When insurance company paid insurance commission they deduct 11.33% as TDS and 6.18 % as Service Tax

Please explain can insurance company deduct 6.18% as Service Tax

Hi ,

As fae as my knowledge is concerned there certain services wherein instead of service provider receipient of service is liable to pay service tax. Relationship between Insurance Company and Insurance Agent is one such case wherein Insurance agent eventhough is a service provider is not liable to collect and pay service tax but insurance company which is a receipient of service is liable to pay service tax.

Please tell me if I m wrong.