Deduction in case of commission of insurance agents. - Income Tax - 1546/CBDT

INSTRUCTION NO. 1546/CBDT Dated: January 6, 1984 Attention is invited to Board Circular dated the 14th September, 1965 issued from F.No.14/9/65-IT(AI) on the subject. It has been mentioned in that instruction, inter alia, that where detailed accounts regarding expenses incurred by the insurance agents are not maintained, an adhoc deduction for expenses at the rate of 40 per cent of the first year's commission should be allowed. A ceiling of Rs.6000 in respect of such expenditure where the gross insurance commission do not exceed Rs.20,000 was laid down and the discretion to grant a larger allowance not exceeding Rs.10,000 in special circumstances was explained in detail. 2. The Board has been receiving representations that the rate of deduction should be raised from 40 per cent having regard to the increase in costs. The Board has considered these representations and has decided that expenditure may be allowed @50 per cent of the year's commission where the gross commission is less than Rs.60,000. The above instruction of 22-9-1965 are modified to this extent. It may be clarified that these instructions will also apply to commission earned by authorised agents on the deposits secured by them under the Public Provident Fund Scheme. 3. These instructions may be brought to the notice of all officers in your charge.