Deduction U/s 57 for LIC Agents

Deduction U/s 57 of Income Tax Act, 1961 for Income earned by LIC agent as Income From Other Sources :-

The benefit of adhoc deduction to Insurance agents of the Life Insurance Corporation having total commission (including first year commission, renewal commission and bonus commission) of less than Rs. 60,000 for the year, and not maintaining detailed accounts for the expenses incurred by them, may be allowed as follows :  

(i)  where separate figures of first year and renewal commission are available, 50 per cent of first year commission and 15 percent of the renewal commission;

(ii)  where separate figures as above are not available, 100/3 per cent of the gross commission. In both the above cases, the adhoc deduction will be subject to a ceiling limit of Rs. 20,000.

The “gross commission” in (ii) above will include first year as well as renewal commission but will exclude bonus commission. The complete amount of bonus commission is taxable and will be taken into account for purpose of computing the total income, and no adhoc deduction will be allowed from this amount. The benefit of ad hoc deduction will not be available to agents who have earned total commission of more than Rs. 60,000 during the year. The admissibility of the expenditure claimed by such agents will be decided by the Assessing Officers as per the provisions of the Income-tax Act. —Circular No. 648, dated 30-3-1993 

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Income Tax Slabs & Rates for Assessment Year 2016-17

Knowing tax rates will help to invest proper to save tax and save money. Here it is listed for your help. Check your taxable limits and tax exemption limits. Income Tax Slabs & Rates for Assessment Year 2016-17 pertaining to F. Y. 2015-16.

I. Individual resident aged below 60 years(i.e. born on or after 1st April 1956)

Income Tax :

	Income Slabs		Tax Rates
1	Where the taxable income does not exceed Rs. 2,50,000/-.		NIL
2	Where the taxable income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.		10% of amount by which the taxable income exceeds Rs. 2,50,000/-. Less ( in case of Resident Individuals only ) : Tax Credit u/s 87A – 10% of taxable income upto a maximum of Rs. 2000/-.
3	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.		Rs. 25,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
4	Where the taxable income exceeds Rs. 10,00,000/-.		Rs. 125,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 12% of the Income Tax, where taxable income is more than Rs. 1 crore.

Education Cess : 3% of the total of Income Tax and Surcharge

II Senior Citizen(Individual resident who is of the age of 60 years or more but below the age of 80 years at any time during the previous year i.e. born on or after 1st April 1936 but before 1st April 1956)

Income Tax :

	Income Slabs		Tax Rates
1	Where the taxable income does not exceed Rs. 3,00,000/-.		NIL
2	Where the taxable income exceeds Rs. 3,00,000/- but does not exceed Rs. 5,00,000/-		10% of the amount by which the taxable income exceeds Rs. 3,00,000/-. Less : Tax Credit u/s 87A – 10% of taxable income upto a maximum of Rs. 2000/-.
3	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-		Rs. 20,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
4	Where the taxable income exceeds Rs. 10,00,000/-		Rs. 120,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 12% of the Income Tax, where taxable income is more than Rs. 1 crore.

Education Cess : 3% of the total of Income Tax and Surcharge.

III. Super Senior Citizen(Individual resident who is of the age of 80 years or more at any time during the previous year i.e. born before 1st April 1936)

Income Tax :

	Income Slabs		Tax Rates
	Where the taxable income does not exceed Rs. 5,00,000/-.		NIL
	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-		20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
	Where the taxable income exceeds Rs. 10,00,000/-		Rs. 100,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 12% of the Income Tax, where taxable income is more than Rs. 1 crore.

Education Cess : 3% of the total of Income Tax and Surcharge.

IV. Any NRI or HUF or AOP or BOI or AJP

Income Tax :

Income Slabs			Tax Rates
i.	Where the taxable income does not exceed Rs. 2,50,000/-.		NIL
ii.	Where the taxable income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.		10% of amount by which the taxable income exceeds Rs. 2,50,000/-.
iii.	Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.		Rs. 25,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iv.	Where the taxable income exceeds Rs. 10,00,000/-.		Rs. 125,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.

Surcharge : 10% of the Income Tax, where taxable income is more than 

Rs. 1 crore.

Education Cess : 3% of the total of Income Tax and Surcharge.

V. Co-operative Society

Income Tax :

Income Slabs			Tax Rates
i.	Where the taxable income does not exceed Rs. 10,000/-.		10% of the income.
ii.	Where the taxable income exceeds Rs. 10,000/- but does not exceed Rs. 20,000/-.		Rs. 1,000/- + 20% of income in excess of Rs. 10,000/-.
iii.	Where the taxable income exceeds Rs. 20,000/-		Rs. 3.000/- + 30% of the amount by which the taxable income exceeds Rs. 20,000/-.

Surcharge : 12% of the Income Tax, where taxable income is more than 

Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

VI. Firm : 

Income Tax : 30% of taxable income.

Surcharge : 12% of the Income Tax, where taxable income is more than 

Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

VII. Local Authority :

Income Tax : 30% of taxable income.

Surcharge : 10% of the Income Tax, where taxable income is more than 

Rs. 1 crore.  (Marginal Relief in Surcharge, if applicable)

Education Cess : 3% of the total of Income Tax and Surcharge.

VIII. Domestic Company :

Income Tax : 30% of taxable income.

Surcharge : The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge

• At the rate of 7% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
• At the rate of 12% of such income tax, provided that the taxable income exceeds Rs. 10 crores.

Education Cess : 3% of the total of Income Tax and Surcharge.

IX. Company other than a Domestic Company (Foreign Company 

Income Tax :

• @ 50% of on so much of the taxable income as consist of (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government.
• @ 40% of the balance

Surcharge :

The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge as under

• At the rate of 2% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
• At the rate of 5% of such income tax, provided that the taxable income exceeds Rs. 10 crores.

Education Cess : 3% of the total of Income Tax and Surcharge.

Marginal Relief in Surcharge

When an assessee’s taxable income exceeds Rs. 1 crore, he is liable to pay Surcharge at prescribed rates mentioned above on Income Tax payable by him. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of Rs. 1 crore by more than the amount of increase in.

Example In case of an individual assessee (< 60 years) having taxable income of 
Rs. 1,00,01,000/-

1.	Income Tax	Rs. 28,25,300
2.	Surcharge @12% of Income Tax	Rs. 3,39,036
3.	Income Tax on income of  Rs. 1 crore	Rs. 28,25,000
4.	Maximum Surcharge payable (Income over Rs. 1 crore less  income tax on income over  Rs. 1 crore)	Rs. 700/- (1000 – 300)
5.	Income Tax + Surcharge payable	Rs. 28,26,000
6.	Marginal Relief in Surcharge	Rs. 3,38,336/-     (339036 – 700)

Suggestion : Kindly refer Income Tax website for more info. 

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