Tds on payments made by co. as insurance premium

If the Director is employee of your Company then the amount of premium paid by your company for his insurance is part of his salary and TDS should be deductred u/s 192.

Dear Arpana,

Thank you for your reply

The directors and officer's liability insurance is not done in the capacity of employee. It is for the benefit of company. Therefore, TDS on salary concept is not applicable. I hope you get it. So would it change your opinion now??

Thank you

Regards

Diwakar Gupta

Dear Diwakar

According to Sec 17 'Any portion of the premium paid by an employer in relation to an employee, to effect or to keep in force an insurance on the health of such employee under any scheme approved by the Central Government for the purposes of clause (ib) of sub-section (1) of section 36;'

Even if the insurance payment is for the benefit of the company and not in the capacity of employees it will be a perquisites in the hands of director and hence form part of his salary.

If however the Director is not an employee of your company then I think you would have to deduct TDS u/s 194J(1) @ 10%.

I hope it helps.

Thanks and regards

Arpana