Deduction of income-tax at source--Section 194D of the Income-tax Act, 1961--Deduction from insurance commission, etc.--Financial year 1980-81

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....00 wherein it was intimated that the deduction of income-tax at the same rates as were applicable during the financial year 1979-80 may continue to be made during the financial year 1980-81 from payments of income by way of insurance commission under section 194D of the Income-tax Act, 1961. The Finance (No. 2) Bill, 1980, introduced in Parliament on 18th June, 1980, proposes, in Part II of the First Schedule, the following rates for deduction of tax at source under section 194D of the Act during the financial year 1980-81:- Income-tax Surcharge I. In the case of a person other than a company 10 per cent Nil II. In the case of a domestic company 21.5 per cent 1.5 per cent. 2. Though provisions of section 194D of the Income-tax Ac....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tes prescribed in the Finance Act, 1980, no adjustment therefore need be made. 4. The substance of the main provisions in the law in so far as they relate to deduction of income-tax from insurance commission is given hereunder:- (i) For the purposes of deduction of tax at source "Insurance Commission" will mean an income by way of remuneration or reward, whether by way of commission or otherwise, for soliciting or procuring insurance business (including business relating to continuance, renewal or reviving of policies of insurance). (ii) Deduction will be made at the time of the credit of the income to the account of, or the payment thereof (by whatever mode) to the payee, whichever is earlier. (iii) The tax deducted should be paid to t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....shown separately in the challan in the space provided for that purpose. (v) The amount of tax to be deducted at source should be rounded off to the nearest rupee ignoring amounts less than 50 paise and increasing the amount of 50 paise or more to one rupee as required under section 288B of the Act. (vi) At the time of deducting tax from the insurance commission credited to an agent's account, adjustment for any debits made in his account in respect of excess commission credited or paid to him earlier is not permissible and income-tax must be deducted from the full amount of commission credited to his account. (vii) It will be open to the recipient of the commission other than a company to make an application in Form No.13D to the Income-....