Keyman insurance policy (Income Tax)

This query is : Resolved

Author : Anonymous

( Author )
18 August 2012

One of my client had taken keyman insurance policy for its director. After 3 years it assigned it to director but paid premiun on it regularly & claimed expense u/s 37 regularly. The policy get matured in the year march 2011 but proceeds received by director directly in april 2011. Company wants to take that proceeds into its account & to show that amount as loan from director.

My query is in which hand (company / Director) the proceeds received by director will be taxable ?

If director gives all money received by it to compny, is this right to take this proceeds in the income of Company.....

Please replay as soon as possible, its urgent

CS, Deepak Pratap Singh

( Expert )
18 August 2012

Dear Friend , the proceeds from Keyman insurance policy is taxable in hand of company. Since you have claimed premium amount u/s. 37 of the Income Tax Act, 1961 then the proceeds will be income for the company. You can't show it as a lone to director. Thanks

Author : Anonymous

( Author )
18 August 2012

Thanks for your reply. But my point is the proceeds is received by director directly in his account. So i want to know whether it is to be taxed in the hand of director or company....