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

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....4D of the Income-tax Act, 1961--Deduction from insurance commission, etc.--Financial year 1980-81. Sir, I am directed to invite a reference to this Department's Circular No. 271 (F.No. 275/18/80-ITB) dated the 20th May, 1980, See [1981] 129 ITR (St.) 400 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 A....

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.... 3. It is requested that the deduction of tax at source from payments of income by way of insurance commission may be made during the financial year 1980-81 on payments made after 18-6-1980 according to the above rates. If any deduction has already been made according to the rates 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 busin....

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.... from payment of insurance commission       made to non-companies, i.e., individuals, etc. 8 (In blue colour band) ITNS 39 It is very necessary for correct accounting of tax payments in the Income-tax Department that the appropriate chalan form is used for making the payment. Where the payment of tax includes any surcharge it should be 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 cre....