Amount paid by employer to affect an assurance on the life of the employee

Amount payable by an employer, directly or indirectly, to maintain an assurance on the life of the assessee or to effect a contract for an annuity (other than payments made to recognised provident fund or approved superannuation fund or deposit –linked insurance fund established under the coal mines provident fund Act or employee’ provident fund Act) is taxable in the hands of all employees. It may, however, be noted that insurance premium paid by the employer under certain schemes, such as, Group Insurance Schemes, Employees’ state insurance schemes and Fidelity Guarantee Scheme, is not regarded as perquisite and hence not taxable in the hands of the employees.

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