What should be the tax treatment of Keyman Insurance Policy?
When it wl be chargeable to B/P & other source.?
Thanx in advance.
Keyman Insurance Policy
Gunjan Jain (CA) (127 Points)
24 March 2010
4 Replies
Amir
(Learner)
(4016 Points)
Replied 24 March 2010
Dear Gunjan,
Sum received on Key man Insurance policy is charged to tax as follows -
1) As Salary - If sum is received by Employee
2) As PGBP - If sum is received by Employer
3) As Othersources - If sum is received by any family member of the employee and where there is no employer-employee relationship
Gunjan Jain
(CA)
(127 Points)
Replied 24 March 2010
Dear aamir. Thank u. but i need more details.
Suppose an employer hv taken keyman insurance policy for his employee and he get resigned/retired after 3 years, then who can claim for policy amount?
Plz reply...
Amir
(Learner)
(4016 Points)
Replied 24 March 2010
Dear Gunjan,
Keyman Insurance Policy have 3 things -
1) Owner
2) Insured
3) Benificiary
Now these 3 people can be same or can be diffrent, it depend upon the type of policy. So Tacxabitily will be in the hands of the person who receives it.
PLz go through this article - I am sure most of ur doubts will be setteled -
C.Balaji
(Learner)
(1867 Points)
Replied 24 March 2010
Completely agree with Amir bhai................
Incase of Keyman Insurance Policy......
Sum received by employee - Salary.....
Received by Employer - Business Income.....
Received by Family member of employee - Other sources....
It will be taxable in the hands of Receipient...........
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