Case Law

[sunil mehta]

Suppose a lic agent submits lower tds certificate ,issued by I.Tax authorities, to lic authorities.The limit prescribed is Rs.20 lacs against lic commission income for f.y.2008-09 @ 3%.If commission payment exceeds rs.20 lacs during f.y.2008-09 at ant time ,say rs.22 lacs, then lic auth. deducts TDS @ 10.3 % on full amt. of rs.22 lacs and not on balance amt. of rs.2 lacs.(22lacs-20 lacs limit).Actually, the practice followed and accepted by the I.Tax dept. is that upto the limit prescribed by IT dept,TDS is deducted at a lower rate and thereafter TDS is deducted at 10.3 % on amt. exceeding Prescribed limit (in our case it is rs.20 lacs). The lic authorities are not ready to change this practice. They want to refer actual legal text matter which we submit as defence. I require any old circular or instructions from CBDT where the present practice followed is narrated.or Is there any case law supporting agent's view.

AI Summary

Clarification Sought on TDS Deduction for LIC Commission with Lower TDS Certificate; Sections 197, Rules 28 & 28A Referenced An individual raised a query about the correct practice for deducting TDS on LIC commission when a lower TDS certificate is submitted. The issue involves a scenario where commission payments exceed the prescribed limit, leading to a higher TDS rate on the entire amount rather than just the excess. Two respondents suggested that statutory provisions like section 197 and rules 28 and 28A should clarify the issue. They advised consulting the certificate issuing authority for clarification or negotiating with LIC authorities. If unresolved, judicial intervention might be necessary.