Managerial Remuneration

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 December 2010 Whether surrender value of Key man insurance policy WHEN ASSIGED TO EMPLOYEE IS TO BE included OR not u/s 309 for calculation of ceiling of managerial remuneration.

udit sharma

udit sharma (Expert)

10 December 2010 Hi..

In my opinion it should be included in the limit of Managerial Remuneration u/s.198 of the Companies Act, 1956

God Bless

Udit Sharma

Jayashree S Iyer

Jayashree S Iyer (Expert)

10 December 2010 Key man insurance is taken by the Company on the life of a key person of the company viz., MD. In the event of any eventuality the benefit under the policy accrues to the Company and not to the family of the Key Man.

Hence it should not be equated with personal life insurance policy taken by MD for which the Company pays the premium on behalf of MD.

In my opinion, the surrender value of Key man insurance policy should not be taken into account while calculating managerial remuneration. It's not a facility or perquisite in the hands of Key Managerial Personnel.

Views on other experts on this issue will be appreciated.

udit sharma

udit sharma (Expert)

10 December 2010 Agreed with expert Jayashree!

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