Diwakar Gupta (CA Final Student) (36 Points)
22 February 2013Dear All,
I have a company and my company is paying premium of Rs 45000 for Director and officers liabilty insurance. Should we deduct TDS for the same? If yes, under which section?
Thank you
Regards
Diwakar Gupta
CA Arpana Singh
(CA)
(50 Points)
Replied 22 February 2013
If the Director is employee of your Company then the amount of premium paid by your company for his insurance is part of his salary and TDS should be deductred u/s 192.
Diwakar Gupta
(CA Final Student)
(36 Points)
Replied 22 February 2013
Dear Arpana,
Thank you for your reply
The directors and officer's liability insurance is not done in the capacity of employee. It is for the benefit of company. Therefore, TDS on salary concept is not applicable. I hope you get it. So would it change your opinion now??
Thank you
Regards
Diwakar Gupta
CA Arpana Singh
(CA)
(50 Points)
Replied 22 February 2013
Dear Diwakar
According to Sec 17 'Any portion of the premium paid by an employer in relation to an employee, to effect or to keep in force an insurance on the health of such employee under any scheme approved by the Central Government for the purposes of clause (ib) of sub-section (1) of section 36;'
Even if the insurance payment is for the benefit of the company and not in the capacity of employees it will be a perquisites in the hands of director and hence form part of his salary.
If however the Director is not an employee of your company then I think you would have to deduct TDS u/s 194J(1) @ 10%.
I hope it helps.
Thanks and regards
Arpana
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