LIVE GST Audit Course by CA Sachin Jain. Register Now!!

Keyman Insurance Policy

Gunjan Jain (CA) (127 Points)

24 March 2010

What should be the tax treatment of Keyman Insurance Policy?
When it wl be chargeable to B/P & other source.?
Thanx in advance.

Reply
Follow
Share

4 Replies

Amir (Learner) (4016 Points)
Replied 24 March 2010

Dear Gunjan,

Sum received on Key man Insurance policy is charged to tax as follows -

1) As Salary - If sum is received by Employee

2) As PGBP - If sum is received by Employer

3) As Othersources - If sum is received by any family member of the employee and where there is no employer-employee relationship

Gunjan Jain (CA) (127 Points)
Replied 24 March 2010

Dear aamir. Thank u. but i need more details.

Suppose an employer hv taken keyman insurance policy for his employee and he get resigned/retired after 3 years, then who can claim for policy amount?

Plz reply...

Amir (Learner) (4016 Points)
Replied 24 March 2010

Dear Gunjan,

Keyman Insurance Policy have 3 things -

1) Owner

2) Insured

3) Benificiary

Now these 3 people can be same or can be diffrent, it depend upon the type of policy. So Tacxabitily will be in the hands of the person who receives it.

PLz go through this article - I am sure most of ur doubts will be setteled -

https://www.bcasonline.org/articles/artin.asp?427