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Tds on on interest component of compensation awarded


27 February 2017 What is the difference between Sec.194a(3)(ix) and Sec.194a(3)(ixa) of Income Tax Act.

I was awarded under the Motor Vehicles Act, a compensation of Rs.13,50,000/- in the year 2011, along with interest at 6% pa calculated from date of filing the petition till the date of deposit, by Motor Accident Claims Tribunal. Insurance Company appealed against the award but was confirmed by High Court. Finally, Insurance Company deposited the sum of Rs.Rs.13,50,000/- in Nov., 2016, along with interest of Rs.3,50,000/- after deducting tax of about Rs.1,60,000/-.

Is TDS by Insurance Company justifiable.

Sec.194a(3)(ix) states that Sec.194A (1) shall not be applicablen
(1) to such income credited by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal;
(2) to such income paid by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal where the amount
of such income or, as the case may be, the aggregate of the amounts of such income paid during the financial year does not exceed fifty
thousand rupees;

How to harmoniously intrepret Sec.194a(3)(ix) states that Sec.194A (1).

Please clarify.

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03 March 2017 Is this question very complex? No expert to clarify on this?



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