pls Define about keyman insurance policy ?
mounika
(semi qualified chartered accountant)
(981 Points)
Replied 18 August 2011
key men insurance policy is a type of life insurance policy taken by the person on the life of another person who is or was the employee of first mentioned person or connected in any manner what so ever with the business of first mentioned person. premium paid under kip is allowed as business expenditure. any sum received under kip including bonus is considered as income u/s 2(24). the exemption given under sec 10(10d) is not available to sum received under kip. hence income received under kip is taxable u/s17(3) or u/s28 or u/s 56 depending on d situation. hopes u understood
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 18 August 2011
GOOD EXPLANATION BY MOUNIKA- I AGREE
Rohtash
(CA - Final / CS / B.Com)
(1140 Points)
Replied 18 August 2011
Robin
(AUDITOR)
(854 Points)
Replied 18 August 2011
CAN WE TREAT GENERAL LIFE INSURANCE PREMIUM PAID BY COMPANY ON BEHALF OF ITS DIRECTORS AS
KEYMAN INSURANCE POLICY AND CLAIM AS BUSINESS EXPENDITURE ?
FURTHER , WHAT DIFFERENCE IT MAKES FROM LIC POLICY AND KEYMAN POLICY ? PLZ ELABORATE
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