02 January 2015
We are providing medical insurance cover to the employees w.e.f 1st Jan 2015. Needless to say, the premium of this is incurred by the Company. Also, along with this, we have given an option to the employees to insure their parents, premium of which, initially will be paid for by the Company and we will recover the premium form the employees in 6 equal installments starting Jan 2015. The insurance Company is giving us one consolidated invoice for the parents’ premium with an annexure with details of each employee and their parents. Need the following clarifications:
1. Basis the consolidated invoices with annexure given by the insurance Company, can we give tax exemption to the respective employees? 2. If yes, can we give the full exemption in the FY 2014-15, since the premium is paid fully by the Company in Jan 2015 – In other words, can we treat this as an advance to the concerned employee, and give full exemption in FY 2014-15 3. Or do we need to give tax exemption for the amount we have recovered from the employees till 31st March 2015 and the balance in 2015-16?
02 January 2015
you can give the deduction on paid amount by the employee. if its show as advance to employee then you can give he full amount deduction
02 January 2015
Thanks! Two clarifications: 1. @ Vaibhav, If Company allows deduction for part amount, can balance amount be allowed in next year when this amount is recovered. 2. @ Rupesh, Can company allow full deduction even if requirement under section 80D is that it should be paid out of Income Chargeable to tax.
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