Death benefit to legal heir

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 May 2014 Dear Sir,

Our client, Mrs.Desai's husband passed away in Feb,2014. He was an employee of a Big Power Distribution company in India. Being legal heir, she is to receive a death benefit from Company of Rs.15 Lacs.

This is apart from PF, Gratuity, Leave encasement & Pension. This is under company's private Policy to help legal heir of employee who died while in service.It is not recognized by any government or not a part of fund.

Kindly advice on taxability. Cant it be exempted income?

Sandeep Dharar

Sandeep Dharar (Expert)
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02 May 2014 No it is fully taxable.

Querist : Anonymous

Querist : Anonymous (Querist)

03 May 2014 Thanks Sir..but I am confused whether this income will be taxable in hand of his spouse in individual capacityor in hands of spouse as legal representative.

Sandeep Dharar

Sandeep Dharar (Expert)
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03 May 2014 In the hands of spouse individually.

Querist : Anonymous

Querist : Anonymous (Querist)

08 May 2014 Sir, Now here widow is getting death compensation as a nominee to the policy of company. However, as per Hindu succession Act, all legal heirs have right over this amount of death benefit. In such case, can all legal heir file return showing their share of benefit and pay tax whereas widow claim refund.

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