Are you an LIC agent wondering how to file your taxes this year? This ITR Filing Guide for LIC Agents will help you understand the right form to use, the deductions available, and the latest TDS rules for AY 2025-26. Filing your Income Tax Return correctly ensures compliance, avoids penalties, and helps you claim eligible refunds. Let’s break down the process step by step.
Which ITR Form Should LIC Agents File?
One of the most common questions in any ITR Filing Guide for LIC Agents is about the correct ITR form. LIC agents must file ITR-3. This form is specifically for individuals and Hindu Undivided Families (HUFs) earning income from business or profession, such as commission from insurance companies. LIC agents are not eligible for the presumptive taxation scheme under Section 44AD, so ITR-4 cannot be used.
Key Income Sources and Deductions for LIC Agents
Understanding your income and eligible deductions is crucial in the ITR Filing Guide for LIC Agents. As an LIC agent, your main income is the commission earned from selling insurance policies. Here’s what you need to know:
- Commission Income: Includes first-year commission, renewal commission, and bonuses.
- Ad Hoc Deduction: If your gross commission is up to ₹60,000 and you haven’t maintained detailed expense records, you can claim:
- 50% deduction on first-year commission and 15% on renewal commission,
- or One-third of the gross commission if separate figures aren’t available (subject to a ₹20,000 ceiling).
- Actual Expenses: If you maintain proper records, you can claim actual business expenses like travel, office supplies, and marketing.
- Other Deductions: Under Sections 80C, 80D, and 80G for investments, health insurance, and donations, respectively.
Latest TDS Rules for LIC Agents
Recent changes have made TDS rules more favorable for LIC agents. From April 1, 2025, TDS on insurance commission is reduced to 2% (from 5%), and the threshold for TDS applicability is now ₹20,000 (up from ₹15,000). You can claim a refund for excess TDS while filing your ITR.
Step-by-Step ITR Filing Process for LIC Agents
To ensure a smooth experience, follow this ITR Filing Guide for LIC Agents step by step:
- Gather Documents: Collect Form 16, commission statements, expense receipts, and investment proofs.
- Calculate Income: Add up all commissions, bonuses, and other income sources.
- Deduct Expenses: Apply allowable deductions or ad hoc deduction if eligible.
- Apply Section Deductions: Claim investments and other eligible deductions.
- Compute Tax: Calculate your taxable income and tax liability as per the current slab.
- Pay Tax (if any): Pay any outstanding tax online before filing.
- File ITR-3: Log in to the Income Tax e-filing portal, fill in ITR-3, and submit your return.
- E-Verify: Complete e-verification using Aadhaar OTP, EVC, or by sending a signed ITR-V to CPC Bangalore.
For a detailed guide on filing ITR 3, read our blog on the topic.
Tips for Hassle-Free ITR Filing
- Organize all your documents in advance.
- Use online tax calculators for accuracy.
- File before the deadline (usually July 31st) to avoid penalties.
- Consult a tax expert if you have complex queries or multiple income sources
Final Thoughts
Filing your tax return as an LIC agent doesn’t have to be overwhelming. With this ITR Filing Guide for LIC Agents, you can confidently choose the right form, claim all eligible deductions, and comply with the latest TDS rules. Need help with your ITR filing for AY 2025-26? Chat with us now on WhatsApp for instant support, or book our professional ITR filing services through our website.
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