Why is TDS not deducted on stock insurance premiums and vehicle insurance premiums paid by a company?

[Ramanathan Seshan]

Dear Experts,

I was going through some company expenses and noticed that no TDS is deducted on payments made towards stock insurance and vehicle insurance premiums. Can someone clarify the reason behind this? Is there a specific exemption under the Income Tax Act or any relevant rule that applies here?

Regards,

S Ram

AI Summary

Insurance premiums on stock and vehicles paid by a company are not subject to TDS under current tax practice.
TDS is not applicable to insurance premiums paid by a company for stock or vehicle insurance because such payments are commercial indemnity contracts, not fees for professional services or contractual work, and therefore do not create a statutory withholding obligation; the insurer must report premium receipts as its taxable income.