Deduction for Insurance Premium against Business or Profession Income- Section 30 Income Tax Bill
The Income Tax law prescribes various deductions to a taxpayer carrying on business or profession. One such deduction is “Insurance Premium” expenses which can be claimed as a valid deduction while computing income from business or profession. Let’s have a look at the relevant provisions of Section 30 of Income Tax Bill, 2025 which talks about deduction towards insurance premium to a business entity or to a professional.
Section 30 states that the following payments made towards insurance premium shall be allowed as deduction in computing income chargeable in case of a business or profession under section 26:
- Insurance Premium paid by any assessee to cover the risk of damage or destruction of stock or stores used for the purposes of business and profession.
- Insurance Premium paid by a Federal Milk Co-operative Society on the life of the cattle owned by a members of the primary society supplying milk raised by it to such federal co-operative society.
- Health Insurance Premium paid by the employer in respect of the employees. The following points should be kept in mind in this regard:
(a) Mode of payment should not be in cash.
(b) Premium can be to General Insurance Corporation of India or any other insurer approved by the IRDA.
Note: It is important to note that the deduction under section 30 shall be allowed only if insurance premium is paid during the tax year. It means that the deduction shall not be allowed on accrual or due basis.
Besides above, Section 28 of the Income Tax Bill provides that insurance premium paid in respect of the following can also be claimed as deduction while computing income of business or profession while filing ITR online:
Premium paid in respect of insurance against risk of damage and destruction of:
(a) Premises
(b)Machinery
(c) Plant or
(d) Furniture
Disclaimer: The above information is meant for educational purposes only. Readers are requested to act diligently and under consultation with any professional before applying the information contained in this article. For any support mail at: support@taxwink.com
