Page 94 - IC23 life insurance application

THE EMPLOYER

1) In terms of Section 36 (i) (iv) of the Income Tax Act. The ordinary Annual

contribution paid by the employer is allowed as a deduction for the purpose of

computation of profits and gains of business or profession.

2) In terms of a notification issued by the Central Board the deductible allowance in

respect of contribution for past service is restricted to 80% of the amount actually

paid.

3) The employers annual contribution to the superannuation fund together with

contribution to any provident fund should not exceed 27% of the salary of an

employee for each year.

THE TRUSTEES

1) In term of Section 10 (25) (iii) the interest income received by the Trustees on

Investments belonging to approved superannuation funds is exempt from tax. If the

trustees have paid the contribution to LIC as premium tax relief does not arise.

THE EMPLOYEES

1) In terms of section 17 (2) (v) any sum payable by the employer to an approved

superannuation fund to effect an assurance on the life of the assessee or to

effect a contract for any annuity is not treated as taxable perquisite in the hands

of the employees concerned.

2) In terms of section 17(i), (ii) the pension is treated as salary of the employees &

therefore taxed as earned income.

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