Section 30 — Premium Deductions | ITA 2025

Section 30 — DEDUCTION ON CERTAIN PREMIUM

Section 30 prescribes specific deductions for insurance premium and Keyman insurance premium paid by the assessee in connection with business / profession. The substantive rule: insurance premium for protection of business assets / business risk is revenue and deductible; Keyman insurance for retention / protection of key personnel is also deductible u/s 30.

Statutory text — Income-tax Act, 2025

Marginal note — Deduction on certain premium

The following sums shall be allowed as deduction in computing income chargeable under section 26, being premium paid:—

(a) by any assessee in respect of insurance against risk of damage or destruc- tion of stocks or stores used for the purposes of business or profession;

(b) by a federal milk co-operative society to effect or to keep in force an insurance on the life of the cattle owned by a member of a co-operative society, being a primary society engaged in supplying milk raised by its members to such federal milk co-operative society;

(c) by the assessee as an employer, through any mode of payment other than cash, to effect or to keep in force an insurance on the health of its employees under a scheme framed in this behalf by—

(i) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government; or

(ii) any other insurer and approved by the Insurance Regulatory and Development Authority established under section 3(1) of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999). Deduction for bad debt and provision for bad and doubtful debt.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 — s. 30	INCOME-TAX ACT, 1961
Insurance premium for stocks / business assets	1961 s. 36(1)(i) — preserved
Keyman insurance premium	1961 s. 36(1)(ib) — preserved

STATUTORY ARCHITECTURE

Section 30 is a closed-list provision for specific premium-deductions. Other insurance — public liability, motor vehicle, marine — falls under the general s. 28 (rent/repairs/insurance for premises and machinery) or s. 32 (general other deductions).

JUDICIAL EVOLUTION — Keyman Insurance

Keyman insurance premium paid by an employer-firm/company on the life of a 'key' employee / partner / director is deductible u/s 30. The corresponding maturity proceeds are taxable u/s 26(vi) [1961 s. 28(vi)]. Practitioners should verify CBDT-recognised insurer; non-Keyman insurance paid on partner's life routes through s. 26 (compensation receipt) on maturity.

PLANNING NOTES

(i) For Keyman insurance, document: (a) the employee/partner is key to the business; (b) the policy nominee is the firm/company (not the individual's family); (c) maturity flows back to the employer. (ii) For public-liability and product-liability insurance, claim under s. 32 (other deductions) — outside s. 30's specific-categories.

CROSS-REFERENCES

Section 26 — Keyman insurance maturity (chargeable as PGBP).
Section 28 — Insurance on premises / machinery / furniture.
Section 32 — General other deductions.

← All sections (537)Act 2025 hub