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Which head of commission from lic is taxable

CA Sunil (Auditing and Assurance Service) (169 Points)

15 February 2014

Freinds pls tell me which head of Income LIC commission is taxable.

1.If assesee has no other source of Income .

2.If has another source of income too (Say Salary Income)

3. What deductions and exemption are available for the same.

Please help.

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11 Replies

akanksha (CA Final Student) (325 Points)
Replied 15 February 2014

Commission is taxable under the head "Income from other sources"

If assessee has salary too from some other employer then salary will be taxable under the head "Salary Income"

Deductions or exemptions as available to any other individual wil be applicable.

Thanks

jitender jain (legal consultant) (32 Points)
Replied 15 February 2014

by Circular No. 594 dt. 15th May, 1991, 648 dt. 30th March, 1993 and 677 dt. 28th January, 1994, the Board have specified conditions for giving ad-hoc deductions from commission earned by insurance agent.

1. Where commission earned is less than Rs. 60K - The Benefit of ad-hoc deduction is available to agents who do not maintained detailed accounts for expenses incurred by them and his gross commission income is less than Rs. sixty thousand.

A) Agent of Life insurance of India

Ad-hoc deduction Maximum deduction

a) First Year Commission	50% of First Year’s commission	-
b) Renewal Commission	15% of renewal commission	-
c) First year’s commission and renewal commission where separate figures are not available.	33 1/3% of first year’s commission And renewal commission	Rs. 20,000 of a, b or c
d) Bonus Commission	No deduction

Note:- the benefit of ad-hoc deduciton is not available to agents who have earned gross aggregate commisison of more than Rs. 60,000/- in the previous year.

Arpit Pachisia (CA) (734 Points)
Replied 15 February 2014

Income from LIC commision is generally of insurance agent.

In my opinion, if he/she has no other income, than it will be treated as income from business and profession and will be taxed thereunder.

If he/she has salary income, than it will be definately taxed in the head of Income from other sources.

The benefit of ad hoc deduction will be available to insurance agent upto a commission of Rs.60000 where he/she is not maintaining detailed accounts for the expenses incurred by him/her will be 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 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.
In those cases where income arises more than Rs.60000, there Electricity, Telephone and society bills paid from the agent's account can be claimed, as actual expenditure incurred.

Thanx

SUMIT KUMAR JANGID (CA FINAL STUDENT) (136 Points)
Replied 15 February 2014

Agree with ARPIT, the actual fact of Commission is true & written by Arpit.,

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 15 February 2014

comission will come under income from business and profession

Rupesh Soni (Taxation Consultant & CA final student) (493 Points)
Replied 16 February 2014

U can shown undr other sources or also shwn in PGBP head u can prpere Inc & exp acc*nt nd bal sheet ... claim some exp . Via inc & exp acc*nt....okayy

ramesh (Student) (40 Points)
Replied 16 February 2014

under head pgbp

SOMSHEKAR (JAE) (21 Points)
Replied 03 November 2014

IF LIC AGENT HAVING FD INTEREST WHEATHER IT IS TAXABLE.

Rajendra Sewda (none) (89 Points)
Replied 22 March 2017

If he is showing in other sources whether adhoc deduction is available. And in other sources head only net income is to be shown (after claiming adhoc died.)

MANU KURIAN (TAX CONSULTANT) (6 Points)
Replied 12 June 2019

The gross receipts/income, on which tax has been deducted, are to be entered in the schedules under the respective heads of income, as they are assessable in the year in which the credit for the TDS is being claimed.

earlier this was shown under PGBP But now it is getting notice U/s 139 (9)