Deduction of LIP

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This query is : Resolved

Rohit (Querist)

02 October 2009 Hello,
I'm a PCC student and have following query:
If an employer(Private Ltd. Co.) pays Life Insurance premium of a specified employee, can that company claim insurance premium as its allowable expenditure??? Also, can that employee claim Insurance as a deduction u/s 80C??

Ratan Sharma

Ratan Sharma (Expert)

02 October 2009 It is allowable expenditure for the employer but the employee can not get the benefit u/s. 80C as the LIP is not paid/borne by the employee.

Rajeev

Rajeev (Expert)

03 October 2009 Dear Ratanji ,

under what section is it allowable exp for the company ?

Can Lip paid for employees be said to be incurred for the purpose of business u/s 37(1), is it debited to staff welfare?

or is claimed u/s 36 - Sec 36 no where mentions LIP

Thanks in advance , am just asking out of curiousity

SHIVRATAN SHARMA

SHIVRATAN SHARMA (Expert)

03 October 2009 Key man insurance premium paid by the Company is allowable expesnses. Employee can not claim deduction U/s 80C for key man insurance premium.

Rohit

Rohit (Querist)

03 October 2009 Okay!!! That means employee can avail benefit only if it is borne by himself!!

Thanks a lot to all of you!!!

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