If an Employer purchase Insurance of 6 pay 15 yr maturity on the name of his employee and assigns this on the name of same employee just after paying 6 term premium after receiving the surrender value. Will the maturity of this policy will be non taxable (As per 10 (10D)) for the said employee?
This issue is aptly been explained by the governemnt in recent explanatory notes to finance act 2013, where it has clearly said that a keyman's insurance policy shall remain a keyman's insurance policy till its maturity or early closure irrespectiv of who is paying the premium and for what period. Hence they will be out of the perview of 10(10D) and such encashment is taxable.
Hope this clarifies.
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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