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