Circular No. 216

Instructions for deduction of tax at source from insurance commission during financial year 1977-78 at the rates specified in Part II of First Schedule to Finance (No. 2) Bill, 1977

What this is

Circular No. 216 was issued by the Central Board of Direct Taxes on 31 March 1977. Its subject is Instructions for deduction of tax at source from insurance commission during financial year 1977-78 at the rates specified in Part II of First Schedule to Finance (No. 2) Bill, 1977.

What it does

Directs that deduction from insurance commission under section 194D continue during the financial year 1977-78 at the rates that applied in 1976-77, because the Finance Bill, 1977 as introduced prescribes the same rates. Until further instructions the rates in Part II of the First Schedule to the Finance Act, 1976 are to be used, and any doubt is to be taken to the Income-tax Officer concerned. It follows Circular No. 199 dated 25 June 1976, which had communicated the 1976-77 rates.

Why it was issued

The rates for the new year were still at Bill stage and the Board wanted deduction to carry on uninterrupted on the footing that they were unchanged.

Who it reaches

Insurers paying commission to agents in 1977-78
Insurance agents whose commission suffers deduction
Officers advising payers on the applicable rate

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.194D	s.393

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

Instructions for deduction of tax at source from insurance commission during financial year 1977-78 at the rates specified in Part II of First Schedule to Finance (No. 2) Bill, 1977
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.

What to watch

This is an interim direction expressly subject to further instructions once the year's Finance Act was passed.
It states no figures of its own; they have to be taken from Part II of the First Schedule to the Finance Act, 1976.
The heading refers to the Finance (No. 2) Bill, 1977 while the text refers to the Finance Bill, 1977; either way the rates directed are the 1976 ones.
The direction is for the financial year 1977-78 only.

Where you meet it

An old default proceeding on agents' commission for 1977-78 where the rate has to be traced through the annual circulars.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 31 — Income-tax (Eighth Amendment) Rules, 2009 - Amendments in Forms 24Q, 26Q, 27Q, 27EQ; Substitution of Rules 30, 31, 31A, 25 March 2009
Circular No. 656 — Section 194D l Insurance Commission 26 August 1993
Circular No. 633 — Financial Year 1992-93 20 August 1992
Circular No. 619 — Section 194H l Commission, Brokerage, ETC 1 4 December 1991
Circular No. 614 — Financial Year 1991-92 14 November 1991
Circular No. 570 — Financial Year 1990-91 27 July 1990

← Circular No. 217 · Circular No. 215 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.