Insurance agents got extra Rs 25,000 crore via benami companies: I-T Dept
The Income Tax department is learnt to have prepared an assessment report on how a string of intermediaries were used by insurers to pay off extra commission — over and above allowed under regulations — to their agents selling insurance policies.
However, the insurance companies, who were pulled up last year by the I-T department, are not the actors under the benami investigation. The current probe, which is at an initial stage, focuses on the intermediary entities (acting as ‘benamidars’) and the official agents (which are the real beneficiaries).
The I-T department estimates the benami amount — the quantum of excess, unauthorised payment — to be in excess of Rs 25,000 crore, sources told ET.
“Intermediary companies are typically small entities which won’t be able to handle more than a few hundred crores. So, a lot of them had to be used, which in turn moved the money through other entities to hide the trail,” said an industry person.
The probe has begun after the I-T department investigation wing submitted a report on its findings suggesting the need of a detailed probe under the Benami Transactions (Prohibition) Act, 2016 (PBPT) against the intermediaries. Last year, the IT department had probed multiple insurance companies and the intermediaries. According to the tax office, insurers have to cough up higher tax as they cannot claim deduction on the extra commission while the amount received by the intermediaries from the insurers is “unexplained income”. The agents, which are large corporate bodies, have
