Sales commission included in form16

Asssesee is getting Salary and Sales commission(which is 4 times the salary).

Salary is regular monthly salary.

Sales commission is not regular income for the assesses, but it has been shown in Salary Slip as Sales commission.

The employer has issued only form 16 and not form 16A by treating both incomes as salary income.

Hence the assessee is not getting the benefit of any deductions on the sales commission.

Kindly guide to get benefit of deductionunder the head business and profession for sales commission.

Please quote any applicable case law.

 

 

Replies (4)
Commission paid in this case will be treated as sales incentive and would form the part of salary. The employer should deduct TDS on gross salary (fixed salary + commssion) after giving all allowances benefit, if any. If employer do so, Form 16 issued by it would show the actual TDS deduction. Thus no other form is needed to claim TDS on commission separately. If employer deducts TDS on fixed salary only, ask him to provide you Form 16A also.

Yes, Tax has been deducted on the Whole amount i.e. Salary and Sales commission, which is reflected in Form 16.

Hence as per your reply, the benefit of deductions under Business and Profession (B&P) cannot be claimed for the Sales commission received.

 

Usually Commission or Sales Commission is assessed under B&P, is there any way to assesses the Sales Commission under B&P?

If connection between two persons is as an employer and an employee, any commission paid to employee will be treated as salary. Commission can be treated as business income only if the connection between two persons is as mutual contract.

Also, in some cases commission is treated as other income when a person gets commission not on regular basis i.e. when getting commission on sales or supply is not his professional/business activity.

thanks for the clarification.

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