in the employer/ee scheme , employer pay the premium on life of employee to motivate emplyee or to retain employee,so it is taxable u/s 17(2)(v)in the hands of employee as perquisite.
employer will assign this policy to employee after 3 to 5 years so that employee will continue the job & if employee leaves the job before this period than employer will not assign this policy to employee & may surrender the policy for cash.in this case employee is not enjoying any rights of this policy till the assignment is done.
1) weather in this scheme F.B.T is payable on premium paid if yes than only 20 % on 30 % of premium paid is payable i.e around 6 % & maturity is tax free in the hands of employee or non taxable again as perquisite.?
because as per my knowledge, it should not be tax as F.B.T since it is already define u/s 17(2)(v)otherwise it would be a double taxation.
2) if F.B.T is not applicable , than is it taxable u/s 17(2)(v)?
3) on what value the perquisite is taxable i.e on premium paid or on surrender value?because u/s 17(2)(v) it is mention that tax is payable on premium paid.
request you to get the clarification on this issues.
Thanks
warm regards
Rupesh shah
CAclubindia
