Raman & Co., a partnership firm, received ₹ 5,00,000 from an insurance company under keyman insurance policy consequent to demise of partner ‘Pramod’. The amount of premium ₹ 2,30,000 paid earlier was claimed as deduction under Section 37 by the firm. The amount received from the insurance company is-
A. Tax-free under section 10(10D)
B. Fully taxable as income
C. ₹ 2,70,000 is taxable
D. ₹ 2,30,000 is taxable
Answer:B
Raman & Co., a partnership firm, received ₹ 5,00,000 from an insurance company under keyman insurance policy consequent to demise of partner ‘Pramod’. The amount of premium ₹ 2,30,000 paid earlier was claimed as deduction under Section 37 by the firm. The amount received from the insurance company is-
A. Tax-free under section 10(10D) B. Fully taxable as income C. ₹ 2,70,000 is taxable D. ₹ 2,30,000 is taxable