01 March 2009
Hello, The query is in relation to tax treatment of keyman policy,as we have taken a keyman insurance policy (where the keyman is our Director of company), we have already paid all the premiums of the policy and the policy is due to maturity in the financial year 2012-13, I want to know as to wheather we can now assign the policy on surrender value in the name of our director and if we can do so the tax treatment in the hands of director and company.
As I understand from the following, if the Company assigns the Policy to the Keyman, surrender value becomes taxable in his hands as perquisite
"...claim or maturity proceeds, including bonus or surrender value or any sum received under or from a key-man insurance policy, would be taxed at the hands of the recipient — the employer or the employee as the case may be"
CAclubindia
