Practical Accounts And Taxation
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Medical insurance premium paid for employee’s family member is a business expenditures- ITAT
Assessee appealed against AO who disallowed the amount paid in relation to the medical insurance paid for the family member of the employee of assessee, as a business expenditure. Both lower first appellate authority dismissed the appeal, on ground that such payments are in nature of perquisite to the employee.
The Delhi bench of ITAT dismissed the order of both lower authority stating that authorities could not bring any evidence to prove that the such payments has no connection with business expenditure of the assessee. All Payments and expenditure made by assessee should not necessarily have direct bearing on earning of income.
Thus Medical insurance premium payment for employees family member is a business expenditure.
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