As per the section of 36 any insurance premium paid for the business purpose then it is allowed as deduction. The deduction are allowed subject to some conditions.
Following are the Insurance premium paid for the business which are discussed below
Section 36(1)(i):
Insurance premium against the risk of damage and destruction of stock in trade, used for the purpose of Business & Profession of the assessee shall be allowed as deduction.
Section 36(1)(ia):
Insurance premium paid by Federal Milk Cooperative Society for the life of cattle owned by the members to primary society supplying milk to it.
Section 36(1)(ib):
Health insurance premium of employees is allowed as deduction if the premium paid in any mode other than cash by the employer.
Example:
Onlinesolves.ltd paid the Health insurance premium for employees 1,00,000. Out of Rs: 1,00,000, Rs:70,000 paid through cheque and Rs: 30,000 paid through the cash. What is teh eligible amount of Deduction under section 36(1)(ib) ?
Solution:
As per the provision of Section 36(1)(ib) of income tax Health insurance premium of employees is allowed as deduction if the premium paid in any mode other than cash by the employer.
So, in the case of Onlinesolves.Ltd Paid health insurance premium paid for employees Rs 1,00,000. But out of that only Rs: 70,000 is paid through cash and Rs: 30,000 is paid through the cash. Amount which is paid through the cash is not allowed as deduction. So, Here the Eligible amount of deduction is Rs: 70,000
