Insurance Commission

[ajay singh]

Does taxability limit of Rs. 10 Lakh available to service provider or not?

 e.g. an Insurance Agent provides services to Insurance Company and his Insurance Commission from Insurance Business or other business where he/she provides services in below Rs. 10 Lakh (This income doesn’t include any Interest, Salary or Pension income. Or which incomes are to be included under Service Tax limit of Rs. 10 Lakh).

 1.       Can Insurance company charge the Service Tax and at what percentage?

2.       At which Commission Intial / renewal or both.

 I have few instances to Insurance companies charging service tax on commission of their agents however the percentage of charge varies from company to company

AI Summary

Insurance Agents: Service Tax of 12.36% on Commissions Below Rs. 10 Lakh via Reverse Charge Mechanism An individual inquired whether the taxability limit of Rs. 10 lakh applies to service providers, specifically insurance agents, whose commission from insurance and other businesses falls below this threshold. The query sought clarification on whether an insurance company can charge service tax and at what rate, as well as whether this applies to initial or renewal commissions. A respondent clarified that insurance companies can charge service tax at a rate of 12.36% on the actual commission paid to insurance agents under the reverse charge mechanism.