Kathmandu. The government has increased the tax rate on the commission received by insurance agents.
The government has increased the tax rate on the service charge and commission received by insurance agents through the Finance Bill. Now, agents will have to pay 20 percent tax of the service charge and commission they receive. Currently, agents are paying 15 percent tax. With this, the tax burden on agents has increased by 5 percent.
According to the bill, a separate tax rate has been fixed for insurance agents by amending the provision under sub-section (1) of Section 88 of the Income Tax Act. As per the new provision, 20 percent tax will be levied on the service charge or commission paid to an insurance agent where the resident is a natural person.
