1. I am directed to invite a reference to this Department’s Circular No. 199 [F. No. 275/62/76-ITJ], dated 25-6-1976 on the subject of deduction of income-tax from payments of income “by way of insurance commission” during the year 1976-77.
2. The Finance Bill, 1977 as introduced in the Parliament, prescribes the same rates for deduction of tax from insurance commission during the financial year 1977-78 as were in force during the financial year 1976-77. Hence, until further instructions, tax at source from payments of income by way of insurance commission within the meaning of section 194D may be deducted at the same rates as are given in Part II of the First Schedule to the Finance Act, 1976.
3. These instructions may please be brought to the notice of all concerned. In case of doubt, the Income-tax Officer concerned may be consulted.
Circular: No. 216 [F. No. 275/20/77-IT(B)], dated 31-3-1977.