Keyman Insurance

Key Man Insurance Policy

 Its an insurance policy taken by a company on its Key Managerial Personnel.  If the company is paying the premium, it will be allowed as a deduction u/s 37, & once the policy matures & the amount becomes refundable will be taxable in the case of company as business income & if received by employee will be taxable as income from other sources.

Dinesh a small clarification.I think the treatment is like this

Amt received by employer - Biz income

Amt received by employee - Salary [sec 17(3) and not other source as u said ]

Amt received by any other person other than the two above - Other sources

Thank u Hareesh I agree with u...