Exemption from TDS on insurance commission
[Section 194D of Income Tax Act – Applicable from 01-06-2017]
Enabling of Filing of Form 15G/15H for commission payments specified under section 194D
The existing provision of sub-section 194D of the Act, inter-alia, provides for tax deduction at source (TDS) at the rate of 5% for payments in the nature of insurance commission beyond a threshold limit of Rs. 15,000 per financial year. Further, the existing provisions of section 197A of the Act , inter-alia provide that tax shall not be deducted, if the recipient of certain payments on which tax is deductible furnishes to the payer a self- declaration in prescribed Form.No.15G/15H declaring that the tax on his estimated total income of the relevant previous year would be nil. Presently, the payment in the nature of income referred to in section 194D is not covered by provisions of section 197A.
In order to reduce compliance burden in the case of Individuals and HUFs, it is proposed to amend section 197A so as to make them eligible for filing self-declaration in Form.No.15G/15H for non-deduction of tax at source in respect insurance commission referred to in section 194D.
This amendment will take effect from 1st June, 2017
[ Clause 69 ]
Relevant Clause 69 of Finance Bill 2017
Amendment of section 197A.
69. In section 197A of the Income-tax Act, with effect from the 1st day of June, 2017,—
(a) in sub-section (1A), after the word, figures and letter “section 194A” at both the places where they occur, the words, figures and letter “or section 194D” shall be inserted;
(b) in sub-section (1C), after the word, figures and letter “section 194A” at both the places where they occur, the words, figures and letter “or section 194D” shall be inserted.
Notes on Clause 69 of Finance Bill 2017
Clause 69 of the Bill seeks to amend section 197A of the Income-tax Act relating to no deduction to be made in certain cases.
The existing provisions contained in sub-sections (1A) and (1C) of the aforesaid section provide that no deduction of tax shall be made under the various sections referred to in the said sub-sections (1A) and (1C) of section 197A, if the persons referred to in the said sub-sections furnish to the persons responsible for paying any income of the nature referred to in specified sections, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil.
It is proposed to amend the said sub-sections (1A) and (1C) of the said section so as to cover deduction at source under section 194D also.
This amendment will take effect from 1st June, 2017.
Books on Budget 2017-18
Taxmann’s Budget 2017-18 -Book
Budget 2017-18- Notifications on Central Excise , Customs and Service tax – New Book
Ajit Prakashan’s Union Budget 2017-18 -New Book
BDP’s Customs Law Manual (2017-18 Budget Editon with CD) -New Book
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