Annual Information Statement – Insurance commission

The taxpayer under Income Tax would by now generally be aware of Form 26AS. But now the taxpayer needs to be aware and educate themselves about the newly introduced ‘Annual Information Statement’.

Recently, the Income Tax Department came up with the Annual Information Statement. Simply putting up, the Annual Information Statement can be said to be a new and revised version of Form 26AS.

Annual Information Statement (AIS) covers a complete profile of the taxpayer. Whereas, Taxpayer Information Summary (TIS) covers a summarized profile of the taxpayer. AIS and TIS are basically introduced with an aim to increase transparency and bridge up the gap between taxpayers and tax collectors.

The present article covers one of the information categories of AIS, namely ‘Insurance Commission’.

Understanding the information category ‘Insurance Commission’ as covered under TDS section 194D-

Section 194D of the Income Tax Act states as under-

• A person is responsible for paying specified income to a resident person;
• Specified income here means, income by way of remuneration or reward, whether by way of commission or otherwise, for-
  • Soliciting or procuring insurance business; or
  • Continuance, renewal or revival of an insurance policy.
• Then such person, responsible for paying the specified income, is required to deduct TDS as per provisions of section 194D.

AIS information source for the information category ‘Insurance Commission’-

As per the TDS provisions, the deductor of TDS under section 194D is required to-

• File quarterly TDS return in Form 26Q; and
• Issue quarterly TDS certificate in Form 16A.

The details furnished by the TDS deductor in Form 26Q will be taken as a source of information under the information category ‘Insurance Commission’.

AIS processing under the information category ‘Insurance Commission’-

The insurance commission on which TDS is deducted under section 194D will be processed and treated as taxable under AIS in the hands of the recipient. AIS will reflect said income under the taxable category of ‘Income from other sources’.