Taxability of income

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sagar kotak (Querist)
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04 December 2012 A Employer takes Life insurance for his employee (other then KEY man insurance) and premium paid by him, for the purpose of retain the employee(Employee has proper educational qualification to do their job), and employer made contract for 10 years.

my questions are,.....

1. Employer can claim the premium paid as a business expenditure.?

2. if any amount taxable in the hands of employee as a perquisite.?

3. At the time of maturity any amount taxable in the hands of employee.?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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05 December 2012 Please clarify whether the policy is in the name of the of the employer or the employee.

If it is in the name of the employer:

1. The premium is allowed as expenditure u/s 37(1).

2. There is no tax implication in the hands of the employee.

If it is in the name of the employee:

1. Premium shall not be allowed as deduction.

2. The premium amount shall be taxable in the hands of the employee u/s 17(2)(iv).

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sagar kotak

sagar kotak (Querist)
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05 December 2012 The policy on the name on the name of empoyee

what about taxability at the time of maurity of policy.?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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05 December 2012 Maturity proceeds from a life insurance policy is exempt.

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