LIC agents main earning is commission. So, Income Tax Department allows some relief to favour Insurance agent. But this relief is for small commission earning agent. If commission earned from LIC insurance business is below Rs.60,000/- p.a. and if no separate books of accounts maintained then the entitlement for deduction is as follows:
i) On First Year Commission - deduction is 50%
ii) On Renewal Commission - deduction is 15%
The LIC Commission after claiming deduction was mentioned above will be included and can be disclose with other source of income for tax purpose.
The benefit of Adhoc deduction will not be available to agents who have earned total commission of income more than Rs.60,000/- during the year.
In case gross commission earned by an Agent from LIC exceeds Rs.60,000/- per annum then, he will be not entitled for claiming deduction referred above. He has to maintain books of accounts as required under the Income Tax Act. The following books and documents are recommended to be maintained :
1) Cash Book
2) Bank Book
3) Ledger Book
4) Journal Book
5) Vouchers And Bills
6) LIC Commission Statement
7) TDS Certificates Received from LIC
8) Bank Pass Book, Cheques Book, Deposit Voucher
9) All Other Connected Documents
Also Read : deduction U/S 57 For LIC Agents
LIC Agents are entitled to claim all expenses incurred for generating LIC Commission such as :
a) Salary to Staff
b) Rent for Office Premises, in case own office then maintenance for the same
c) Fuel Expenses and maintenance for maintaining vehicles.
d) Books, Publications, Periodicals expenses connected to business
e) Printing And Stationery
f) Electricity Expenses
g) Travelling / conveyance Expenses
h) Telephone / Mobile / Internet Expenses
i) Postage Expenses
j) Depreciation Expenses on Vehicles, Computers and Other Office Equipment
k) Gifts, Diaries, Calenders Expenses etc.
l) Staff Welfare Expenses
m) Any Other Expenses related to generate commission.
