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This query is : Resolved

Rupesh (Querist)

15 September 2009 sir , As f.b.t is removed now , what is the implication of tax on life insurance policy is given by employer to employee.

case study :

employer is buying a life insurance policy for employee & paying premium for 3 years but it will assign the policy to employee only if employee dont left the job for 3 years otherwise employer will surrender the policy for cash.

weather employee has to pay tax now or only at the time of assigning the policy ?

& on what value of the policy , employee will have to pay tax ?

pls clarify.

with regds

Rupesh shah (ACA)
mob : 9819556886

Ratan Sharma

Ratan Sharma (Expert)

15 September 2009 Hi,
In my opinion it will be important to see that is there any such agreement between the employer or employee and accordingly tax treatment has to be given. If as per the agreement , the policy is assigned after three in favour of employee then the surrender value is to be added in the income of employee.
If there is no such written agreement then the premium paid has to be included in the income of employee.

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