Income Tax liability for cheque over 20 lacs

Save Share

This query is : Open

Alok (Querist)
Follow

19 April 2011 My client was a director and shareholder in a pvt ltd company. My client wanted to leave the company because of mis-management of funds and improper working of other director (who is also the managing director). My client resigned from the directorship and also transferred his shares to this director. In return, my client was offered Rs. 20 lacs.

CA KRISHNA KUMAR DARUKA

CA KRISHNA KUMAR DARUKA (Expert)
Follow

19 April 2011 What is the nature of compensation. Whether it is value of shares sold or compensation for leaving the company. In first case it will be capital gains depending on length of holding and in second case it will be income from other sources.

Alok

Alok (Querist)
Follow

19 April 2011 Hi,
It was a compensation to settle the dispute i.e. compensation for my client for not to go to court against the other person.

CA KRISHNA KUMAR DARUKA

CA KRISHNA KUMAR DARUKA (Expert)
Follow

19 April 2011 I think it should be Income from other sources. Other expert views are welcome.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now