Salary Deductions: Can I Include Life and Vehicle Insurance Premiums?

Can I add the life insurance premium to salary deductions and also deduct vehicle insurance from the salary?

You can deduct insurance from salary, subject to approval from your management. Some companies have the facility to deduct LIC premium or loan premium of their employees and remit it to the bank. Few companies do not have this system.

Regards, Rajeev

Deduction of Insurance Premiums from Salary

The Payment of Wages Act provides for the deduction of LIC premiums. However, to my knowledge, vehicle insurance premiums are not included in the deduction list.

Thank you.

Authorized Deductions Under the Payment of Wages Act

The Payment of Wages Act provides a list of authorized deductions. It is a common practice in many manufacturing companies to deduct LIC premiums under the "SSS" scheme, i.e., Salary Saving Scheme. The amount deducted is automatically captured for TDS calculations and in Form 16.

Apart from this, it is advisable not to involve in other deductions such as vehicle insurances, as it will only contribute to administrative headaches without adding any value.