whether insurance premium of employee paid by employer be taxable in the hands of the employee as tax perquisite?
Can this be shown as a Reimbursement to employee?
is there anyway to structure this transaction as tax free in the hands of the employee?
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Reimbursement of insurance premium
Replies (7)
Quick Summary
What kind of insurance is it?
If health insurance, it is an allowable business expense.
But if it is a life/term insurance etc (for which the obligation to pay premium lies with the employee), such premiums would be taxable as perquisite in the hands of the employee and an eligible business expense for the employer.
Showing perquisites as reimbursements would be incorrect I think.
Hi,
thank you for reply.
the insurance is a health insurance taken by the employee from a foreign insurer (not from an Indian insurance company). The obligation to pay the premium lies with the employee. But the company wants to pay it. is there anyway this can be shown as a tax free component in the salary?
thank you for reply.
the insurance is a health insurance taken by the employee from a foreign insurer (not from an Indian insurance company). The obligation to pay the premium lies with the employee. But the company wants to pay it. is there anyway this can be shown as a tax free component in the salary?
Ask company to transfer amount to employee account and then from employee account pay health insurance. then it will be allowed as deduction for employee u/s 80D.
Ramaraju deduction under 80d is anyways available. the employer company is merely paying it on his behalf. ultimately it is borne by the employee only
That means even though it is paid by company on his behalf employee is eligible for deduction right?? that means no need to routed through employee's account right??
thanks for the correction.
thanks for the correction.
As it is a kind of perk first we have to add to salary income and then can claim deduction u/s 80D. Hence ultimately there will be no tax liability in the hands of employee. That is tax free. But subject to condition like maximum limit for deduction u/s 80D.
It is an exempt perquisite
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