It is well settled by many case laws that Personal accident insurance premium paid by employer is not a perquisite if a)the policy is taken out by employer & not by employee on his own voluntarily b)the benfits will acrue to employee in future i.e. contingent.[CIT V Lala Shri Dhar (1972)84 ITR 192,Delhi & P.Newcome v CIT (1962)45 ITR 52,Kerala.
Query:-(i)What will be the legal position if life insurance premium is paid by employer on life policies taken out by employer himself on lives of one or more employee?Note that employee has not himself made proposal to LIC ,it is done by employer himself to protect his busines interest and staff welfare measure.
ii)Whether it will be added to salary as perquisite?
iii)What will happen if life policy is assigned to employee after 3 to 5 yrs to employee ?
CAclubindia
