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Group insurance scheme-FBT

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This query is : Resolved

Gautam (Querist)

16 February 2008 Hi
i have a query as regarding the employer contribution regarding Group insurance scheme.
Whether the same is eligible for FBT or not?
and if yes the under which section it is covered?

Thanking you
Gautam

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)

16 February 2008 Contribution to approved gratuity funds or provident funds would be outside the levy of fringe benefit tax. However, the Central Board of Direct Taxes circular is silent on applicability of FBT in respect of group personal accident/workman compensation insurance. It only states that only if the expenditure is a part of statutory obligation it would be exempted. Similar would also be the situation with regard to group health insurance, group medical insurance, group life insurance. We feel that all these payments are not a part of statutory obligation hence they would be subjected to FBT. However, the ESI contribution would be outside the purview of FBT because it is a statutory obligation.

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