Lump sum payment

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Querist : Anonymous

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Querist : Anonymous (Querist)
26 January 2017 as per cbdt circular 573 lump sum payment paid to legal heir of deceased employee is not taxable. now such payment is allowable business expenditure or not u/s 37. also is there any limit on the amount so paid?

26 January 2017 Such payment is allowed as business expenditure. No ceiling but the payment should be reasonable considering the monthly salary paid.

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Querist : Anonymous

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Querist : Anonymous (Querist)
12 May 2017 Thank you Sir,

Salary is Nil at this point but will be Rs. 80000/- per month from next year a. Then is it advisable to pay lump sum payment in the year of salary?

12 May 2017 The compensation should be reasonable based on the salary drawn before death. The compensation should be reasonable considering the next year monthly payment.


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