Premium paid towards employer employee scheme

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2013 Dear sir/Madam,
We had subscribed for employer employee insurance scheme in 2007.then the 5% cap was not applicable.We had bought the same for our directors.
The directors were given monthly salary.Now one of the directors is staying abroad and we are not debiting any salary for him.can we continue to pay the premium in his name?

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
Follow

06 October 2013 Since the premium is for directors then let me know whether this is key man insurance policy. If it is so then 2 years prior to maturity assign this policy to the directors and let the director pay the premium. You can show the premium paid as directors remunaratin but mind it ST is attracting on this payment.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
Follow

06 October 2013 Since the premium is for directors then let me know whether this is key man insurance policy. If it is so then 2 years prior to maturity assign this policy to the directors and let the director pay the premium. You can show the premium paid as directors remuneration but mind it ST is attracting on this payment.

Message likes : 1 times

Upgrade to CAclubindia Pro. Subscribe Now!