Circular No. 340

What it does

Tells insurers that the Finance Bill, 1982 proposes no change in the Part II rates for deduction under section 194D from insurance commission for the financial year 1982-83, so deduction is to continue at the rates communicated by Circular No. 300 dated 27-4-1981 for 1981-82. It annexes the proposed Sub-Paragraph I of Paragraph A of Part III of the First Schedule, which the Bill does change, and says the earlier rates apply subject to that Sub-Paragraph wherever it is applicable. Deductors are asked to bring the instructions to the notice of all concerned and to consult the Income-tax Officer or Public Relations Officer in case of doubt.

Why it was issued

It is the annual instruction to insurers on the rates for deducting from agents' commission for the coming financial year.

Who it reaches

Insurers paying commission to agents in 1982-83
Insurance agents whose commission is deducted from
Non-resident recipients to whom the Part III rates may apply

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.

FINANCIAL YEAR 1982-83
1778. Instructions for deduction of tax at source from insurance commission during financial year 1982-83 at the rates specified in Part II of First Schedule to Finance Bill, 1982
1. I am directed to invite a reference to the Board’s Circular No. 300 [F. No. 275/5/81-IT(B)], dated 27-4-1981 wherein the rates at which the deduction of income-tax was to be made during the financial year 1981-82 from payments of income by way of insurance commission under section 194D were intimated.
2. The Finance Bill, 1982 does not propose any change in the rates at which the deduction of income-tax is to be made during the financial year 1982-83 in Part II of the First Schedule to the said Bill from such income. However, some changes have been proposed in Sub-Paragraph I of Paragraph A of Part III of the First Schedule to the said Bill. A copy of the proposed Sub-Paragraph I is annexed. The deduction of tax may, therefore, continue to be made at the rates intimated in the circular referred to in para 1 above subject to the rates proposed to be prescribed in the annexed Sub-Paragraph, wherever the same are applicable.
3. These instructions may please be brought to the notice of all concerned. In case of any doubt the Income-tax Officer concerned and/or Public Relations Officer may be consulted.

Circular: No. 340 [F. No. 275/20/82-IT(B)], dated 6-5-1982.

What to watch

The operative rates are in the previous year's circular, which has to be read alongside this one.
The Part III Sub-Paragraph I carve-out is the limb most easily missed.
The circular is written on the Finance Bill, 1982 as introduced, so the Act as passed had to be checked.
The rates speak only for financial year 1982-83.

Where you meet it

On an old short deduction demand against an insurer for agents' commission paid in 1982-83.

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. 339 · Circular No. 337 →

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.

What this is