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Is the employer employee policy premium is eligible as expense?
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03 Mar, 2023
by Diganto Nath
As per the new income tax conditions Is the employer employee policy premium can be shown as expense at employer end. Or it has any limitation ? Please clarify in details.
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Dear Mr Nath
As per section 37 (1) , a business can do expenses to run a business . So premium paid under Employer Employee will be allowed as expense.
However , question remain whether this premium will be paid as perquisite or not . As firm is paying premium for the benefit of employee hence it will be treated as perquisite and maturity proceeds will be taxable .
Income tax rules identify keyman insurance and premium paid for term insurance is not added as perquisite.
So question need to be asked for treatment under perquisite and not whether it is allowed as expenses .
I invite views of others
Shailesh
Insurance Samadhan