Bankim1960
Recruitment Consultant
Pon1965
Construction
Vinove
Talent Acquisition Manager
Pmuku
Consultant Trainer
Deepesh Khandelwal
Finance & Accounts / Audit.
Sachinmahade
Accounts & Finance
+8 Others

Thread Started by #Vinove

Dear All,
Please help me with this query:
Our company offers LIC and Mediclaim Policy to employees after they complete 1 year of service.
The amount of premium is paid by the company and the policy is obtained in the name of respective employee.
Since the policy is in the name of the employee, can the employee avail tax exemption against it?
Can we show the amount of premium paid as a part in employee's CTC?
Please help.
Regards
Bhavna
27th May 2010 From India, Delhi
Dear Bhavna,
If the employer make the payment then benifit is to be available by employer in (FP)Fresh Policy. After that if employer not pay second year renewal in that case employee pay the renewal and claim in tax only.
28th May 2010 From India, Pune
If it is part of CTC, the premium amount paid will be excluded in the gross earnings while calculating tax.
28th May 2010 From India, Lucknow
Hi The employer only will get tax benefits since they are paying the premiums. The payment of premium paid by an employer agaisnt a group insurance policy of an employee cannot be clubbed with CTC
29th May 2010 From India, Mumbai
To avail the tax benefit of LIC investment there is basic condition that person should invest from his taxable income. If an employer showing LIC Premium as part of Salary (CTC) of employee, then employee can avail the benefit.
In this case employer should take care of showing LIC Premium as part of salary only and not as Welfare Expenses. (Fortunately there is no question of FBT here onwards).
Now I would like give practile recommendation that in your case why then ER is paying LIC premium, if they dont want to show as Welfare Expenses. Instead increase the Salary (CTC) of EE to that extent of LIC Premium. Then no further doubts will arise. And if you want to see from ER point of view (that Proposal is ER only) then it must be Welfare Expenses. Because ER can pay premium for EE only for the period of his employment with ER.
29th May 2010 From India, Pune
No as you are not making any payment directly nor it is being deducted from your salary.
However a word of caution! Make an assesment of your insurance needs and then see whether your company's initiatives on insurance is sufficient. Chances are it will be short of your requirements.

29th May 2010 From India, Khopoli
Possible Under Employer-Employee scheme, both can avail benefits;
Employee can avail tax benefits under Sec-80C and the employer, one who pays the premium, can avail tax exemptions under BUSINESS Expenses.
Refere Employer-Employee Plans at www.IRDA.com
29th May 2010 From India, Madras
Dear Vinove
Yes, company can claim the premium paid by them either in employer welfare scheme or claim in any other expenditure and claim under section 37 (1) of Income tax.
Where the premium will be considered as a receipt in hands of employee and they can claim the same under section 80 CC for LIC policy and section 80 D for medical insurance policy.
I have one more policy where employee can get tab benefits with immediately and employee can received pension at their retirement
If any of members from this group want more in detail they can free to call me on 98210 14796.
29th May 2010 From India, Mumbai
As per Income Tax Act money paid by the individual from his own funds only will be considered as deduction under section 80c. As the payment is paid by the organisation individual can not claim.
R S Reddy
Senior Branch Manager
LIC
29th May 2010 From India, New Delhi
Hi All,
Take the case of TDS deducted and remitted to the govt. a/c on behalf of an employee by his employer. The amount so deducted was included in his CTC. similarly, he deducts and pays the LIC premium on behalf of an employee basically to ensure that the employees are making some savings. This can be surely claimed u/s 80ccc. the amount would also included in the employee's taxable income too. May be this has no impact but the idea is to make employees save.
Thanks
Jay
29th May 2010 From India, Alandur
The employee can avail of tax benefit under section 80D for Mediclaim premium paid by him/her , subject to a maximum of Rs 15000 ( deduction from taxable income). As the company pays the premium for the policy in the name of the employee, the premium paid by the employer will be treated as a perquisite in the hands of the employee. In that event, the employee can also avail tax benefit under Sec 80D.
As regards premiums paid by the company on employee’s LIC policies, the premiums so paid will be treated as a perquisite in the hands of the employee and taxed accordingly. At the same time, the employee can also avail of tax benefit under Sec80C subject to an overall ceiling of Rs 1,00,000 under all the savings by the employee like Provident fund,NSC, PPF, Equity Linked Savings Schemes in Mutual Funds etc
Whatever benefits in monetary terms are paid by employer will count for CTC.

29th May 2010 From India, Hyderabad
no ..you can not avail tax benefit as most of the time employer buy group policies and which are at discounted price and they get a master policy where its totally their wish to decide on SA(risk cover)they show premium payment in thier expenses and get the benefits.only in the case of sss(salary saving scheems)which are portable plans you can avail the tax benefit.
29th May 2010 From India, New Delhi
Dear.
You can not avail any benefit ,If The payment of premium is paid by an employer
but If it is part of your CTC & the premium amount paid by the employer is included in your gross earnings while calculating tax. then you can avail this benefit.
Regards
S Singh
31st May 2010 From India, Delhi
Hi Samuel, These are not group policies but individual policies obtained in the name of employee(s).
31st May 2010 From India, Delhi
Dear Bhavna,
Hence the employer (company)only pays the premium it is an expense for the company and hence you cannot get the tax benefits. ok. If u want any further clarification or help or assistance on lic policy or matters pl feel free as i am an agent with 25yrs of experience and zonal manager club member. I can even guide u with non taxable pension policies with tax benefits. with greetings. b.radha.
17th July 2011 From India, Madras
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