Employer Employee Presentation
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Transcript of Employer Employee Presentation
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Employer Employee InsuranceScheme
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Employer employee insurance is a welfare measure were by an employer withprogressive outlook buys life insurance on the life of all or selective
employees.
Employer Employee Insurance an overview
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Employer Employee Insurance : Benefits
Employer employee benefits are: For Employer:
Employee retention
Tax Planning
Estate planning
For Employee:
Building corpus for retirement
Financial security through risk management
Future financial planning
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Employer Employeeneeds
Short term need
1. 10 years or less
2. Money for emergencies
Long term need
1. Retention of X no. of Yrs2. Retirement Benefit
3. Building personal capital
Employer Employee Needs
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Key Benefits of Employer Employee
1. Life Coverage of Human Life Value
a) How to save unearned income for family
b) Long term Savings and Protection
2. Retirement benefit/Superannuation benefit
3. Tax benefit in the long run
4. Money for emergencies
5. Estate planning tool
6. Long term Savings and Protection
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How does Employer Employee Insurance works
Employer pays the premium and claim premium as revenue expenditure u/s37(1)(Ref : Circular 762)
Employer has insurable interest under section 2(11) of Insurance Act
Employer Employee Scheme
Conditions
Proposer- Employer
Payor- Employer
Owner- Employer
Life to be Insured Employee
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At the time of premiumpayment.
Business Expense U/S 37(1) of
IT Act 1961.
Treatment of Money
The money will come back tothe employer under following
conditions:
Death Claim
Maturity Benefit
Policy Surrender
Partial
Full
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All receipts under employer
employee in the hands of employer
will be treated as Business Income
U/S 28(vi).
All the receipts in the hands of
employee will be treated as Profit
in lieu of Salary U/S 17(3).(Ref:-
Finance bill 2013)
During Assignment
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In case of Death claim
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Company proposes the policy on the life of the employee
and promises to assign if the employee stays with the
company for 10 years. Company pays the premium and get
the benefit of 37(1) as revenue expenditure.
Employee dies in the 6th.year.
Company receives the Death claim .U/S 28(vi) it is treated
as Business Profits for that financial year. How ever
company makes an exgratia payment in the same financial
year to the widow or Legal heir of the decease employee.
The widow of the deceased employee receives the money100% tax free.(Circular 573).
Company proposes the policy on the life of the employee
and promises to assign if the employee stays with the
company for 10 years. Company pays the premium and get
the benefit of 37(1) as revenue expenditure.
Employer assigns the policy to the employee After
assignment employee dies
Employee legal heir/Spouse receives the Death claim .The
Death Claim to spouse or Legal heir of the decease
employee is tax free under section 10 10 D.
Before assignment After Assignment
Section 10 (10)(D)
Provided that the provisions of 92c[this sub-clause]shall not apply to any
sum received on the death of a person:
http://law.incometaxindia.gov.in/DIT/HtmlFileProcess.aspx?FooterPath=D:/WebSites/DITTaxmann/Act2010/DirectTaxLaws/ITACT/HTMLFiles/2012&DFile=ftn192c_section10.htm&tar=middlehttp://law.incometaxindia.gov.in/DIT/HtmlFileProcess.aspx?FooterPath=D:/WebSites/DITTaxmann/Act2010/DirectTaxLaws/ITACT/HTMLFiles/2012&DFile=ftn192c_section10.htm&tar=middle -
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In case of Surrender
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Company proposes the policy on the life of the employee
and promises to assign if the employee stays with the
company for 10 years. Company pays the premium and get
the benefit of 37(1) as revenue expenditure.
Employee leaves the employment in the 6th.year.
Company surrender the policy .The money received will be
treated as Business Profits U/S 28(vi) for that financial
year.
Company proposes the policy on the life of the employee
and promises to assign if the employee stays with the
company for 10 years. Company pays the premium and get
the benefit of 37(1) as revenue expenditure.
Employer assigns the policy to the employee. After
assignment employee surrender the policy.
It will be treated as profit in lieu of Salary in the hands of
the employee.
Before assignment After Assignment
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In case of Maturity
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Company proposes the policy on the life of the employee
and promises to assign if the employee stays with the
company for 10 years. Company pays the premium and get
the benefit of 37(1) as revenue expenditure.
Employee leaves the employment just before the maturity.
Maturity money comes to the employer .The money
received will be treated as Business Profits U/S 28(vi) for
that financial year.
Company proposes the policy on the life of the employee
and promises to assign if the employee stays with the
company for 10 years. Company pays the premium and get
the benefit of 37(1) as revenue expenditure.
Employer assigns the policy to the employee. After
assignment employee receives the policy Maturity.
It will be treated as Profit in lieu of Salary in the hands of
employee.
Before assignment After Assignment
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Tax Planning through Employer Employee
Money for legacy
Employer will take long term protection and saving plan
Policy will get assigned at the time of retirement
Death claim will go to the nominee or legal heir
Money for retirement
Employer will assign the policy to the employee at the time or
retirement
Employee will do partial withdrawals while considering the tax slab
Money for emergency Employer will surrender the policy in case of emergency
If the expenses are high in year of surrender the income will get offset.
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Documents required for Employer employee
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Documents required for Employer employee Applications.
1. Board resolution , Authorisation letter, Rule of the Scheme
2. Business Insurance Questionnare
3. Profit loss account, Balance Sheet, ITR copy for last three years of the
company.
4. Memorandum of Association and Article of association
5. KYC form of the company (PAN card copy ,ID proof, photograph of the
directors and Address Proof)
6. DOB proof of the employee.
7. KYC of the employee (PAN card copy, ID proof, photo graph of the employee
and Address Proof)8. Form16/ITR of the employee for last 3 years
9. Proposal form and cheque
10. Any other requirement on case to case basis.
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Product for Employer Employee:-
Traditional Plans
Life Perfect Partner Super
7/10/15/20Retirement Benefits
Whole life SuperLong term
Savings and protection Life Gain Premier 6/8/10/12
Wealth Accumulation and protection
Platinum Protect IIProtection
Unit linked Plans
Fast Track SuperWealth
Accumulation and protection.
Note: Payor rider can not be offered under Employer Employee
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Thank You
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THANK YOU