Life Insurance by a trust for its trustee

[Rahul Bagaria]

Can a trust take a life insurance policy for its trustee.What will be the tax impact on the trust and its trustee at the time of maturity and what will be the tax treatment for payment of premium.

AI Summary

Can a Trust Take a Life Insurance Policy for Its Trustee? Exploring Tax Implications and Trust Deed Provisions. A query was raised regarding whether a trust can take a life insurance policy for its trustee and the tax implications at maturity and during premium payment. CA Uma Kothari advised reviewing the trust deed to determine if it allows such payments and to clarify the nature of the trust and trustees. Questions about the policy's purpose, sum assured, premium, tenure, and maturity value were also posed. Surender Gupta suggested that if the trust deed permits such policies, the tax treatment could be similar to that of a regular business entity.