Premium for keyman insurance policy

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abhilasha jain (Querist)
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19 August 2014 Is premium for keyman insurance policy which is assigned to director a Business Expenditure or Personal Expenditure.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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19 August 2014 if taken by co its a valid business exp.

abhilasha jain

abhilasha jain (Querist)
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19 August 2014 But It has been assigned to director by company.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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19 August 2014 that means its co who is ultimately paying na so its business exp

abhilasha jain

abhilasha jain (Querist)
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19 August 2014 Yes co is paying. There is a provision that if policy is assigned by co. to director then proceeds shall be taxable in the hands of the
recipient ie director.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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19 August 2014 in ur 1st query u had asked whether its personal or business exp so its basically a business exp and if there is a policy stating the same still the person making payment will be eligible for exp

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Rupesh Jain

Rupesh Jain (Expert)
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19 August 2014 it claim as business exp...............

Nikhil Kaushik

Nikhil Kaushik (Expert)
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19 August 2014 you are confusing between the payment of premium and taxation of redemption proceeds. The expense shall remain business expenses (as tushar has said) whereas any proceeds from keyman insurance policy shall be taxed in director's tax return as profit in lieu of salary under "salaries" head.

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