TDS rates applicable on incentives paid to the Sales Force of PLI & RPLI
TDS rates on PLI & RPLI Incentive payable to the Sales Force of PLI & RPLI is 5%. This is as per the clarification issued by the Department of Posts on June 6, 2023.
The clarification was issued in response to a query regarding the GST and TDS rates applicable on incentives paid to the sales force of PLI & RPLI policies.
TDS rates on PLI & RPLI Incentive
The clarification states that the TDS rate of 5% will be applicable on the gross amount of incentive paid to the sales force, irrespective of the amount of commission or brokerage earned by them. The TDS( Tax deducted at source) will be deducted by the employer, i.e., the Postal Life Insurance (PLI) or the Rural Postal Life Insurance (RPLI), and deposited with the Income Tax Department.
The clarification also states that the GST rate applicable on incentives paid to the sales force of PLI & RPLI policies is 18%. This GST will be paid by the employer, i.e., the PLI or the RPLI.
The clarification is applicable from the date of its issue, i.e., June 6, 2023. Here are some additional details about the TDS rates applicable on incentives paid to the Sales Force of PLI & RPLI:
The TDS rate of 5% applies only to the gross incentive amount paid.
Any taxes or cess that are levied on the incentive will not be included in the calculation of the gross amount.
The TDS( Tax deducted at source) will be deducted by the employer concerned, i.e., the PLI or the RPLI, at the time of payment of the incentive.
The TDS will be deposited with the Income Tax Department by the employer within 30 days of the end of the month in which the incentive was paid.
The employee will be required to furnish a PAN to the employer in order for the TDS to be deducted.
Further in case if PLI agents can obtain their TDS certificate from the PLI for filling the income tax return.
PLI agents can check their business procured during the months and calculate the incentive earned by them as per the policy procurement report available in the PLI Agent Portal.