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Taxability of Agent Commission

Work out the ad-hoc deduction and taxable commission for an insurance, UTI or mutual-fund agent — available only when total commission is ₹60,000 or less (CBDT Circular 648).

Switch calculator — current: Taxability of agent commission

Your income tax

TDS & TCS

Advance tax & late fees

Your details

LIC commission

First-year + renewal together, when not shown separately.

No ad-hoc deduction on this.

UTI / mutual-fund commission

Your answer

₹ —

Still needed: at least one commission amount.

  • The figure, and how it compares where there is a choice
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For guidance only — not tax advice. Every figure is drawn from BharatX’s verified rule book, with the sections and rules shown alongside it.

Taxability of agent commission: how it works and FAQs

FY 2025-26 (Income-tax Act 1961) and FY 2026-27 (Income-tax Act 2025) · Updated

How it works

An insurance, UTI or mutual-fund agent whose total commission is ₹60,000 or less, and who does not keep detailed books, can claim an ad-hoc deduction: 50% of first-year LIC commission, 15% of renewal, or 33⅓% if combined, capped at ₹20,000, plus 50% of UTI / mutual-fund commission.

An insurance, UTI or mutual-fund agent whose total commission is ₹60,000 or less, and who does not keep detailed books, can claim an ad-hoc deduction: 50% of first-year LIC commission, 15% of renewal, or 33⅓% if combined, capped at ₹20,000, plus 50% of UTI / mutual-fund commission. Taxable commission is the total minus that deduction.

  1. Add up all commission earned in the year — first-year, renewal, UTI, mutual-fund, specified-security and notified commission, plus any LIC bonus.
  2. If the total is over ₹60,000, no ad-hoc deduction is allowed (CBDT Circular 648).
  3. Otherwise the LIC deduction is 50% of first-year + 15% of renewal (or 33⅓% of combined), capped at ₹20,000.
  4. Add 50% of UTI, specified-security and notified commission; bonus from LIC gets nothing.
  5. Taxable commission = total commission − ad-hoc deduction.

Worked example

Taxable commission = 35,000 − 14,000 = ₹21,000.

An LIC agent earns ₹20,000 first-year commission, ₹10,000 renewal commission and ₹5,000 UTI commission in the year.

  1. Total commission = 20,000 + 10,000 + 5,000 = ₹35,000 (within ₹60,000).
  2. LIC deduction = 50% × 20,000 + 15% × 10,000 = ₹11,500 (below the ₹20,000 cap).
  3. UTI deduction = 50% × 5,000 = ₹2,500.
  4. Ad-hoc deduction = ₹14,000.

Taxable commission = 35,000 − 14,000 = ₹21,000.

Frequently asked questions

Who can claim the ad-hoc deduction on agent commission?

An insurance, UTI or mutual-fund agent whose total commission for the year is ₹60,000 or less and who does not maintain detailed books of account, under CBDT Circular 648.

What is the ad-hoc deduction for an insurance agent?

50% of first-year commission and 15% of renewal commission (or 33⅓% of combined commission), subject to a maximum of ₹20,000, plus 50% of UTI / mutual-fund commission.

Is the deduction available if commission is above ₹60,000?

No. If total commission exceeds ₹60,000, no ad-hoc deduction is allowed — the agent must claim actual expenses against the commission instead.

Is bonus from LIC eligible for the deduction?

No. A bonus received from LIC is fully taxable and gets no ad-hoc deduction.

Every figure the calculator shows lists the sections it relies on under “Legal basis”. For guidance only — not tax advice.