Receipt From LIC
This query is : Resolved
CA ARVIND TIWARI
(Querist)
15 December 2008
Whether receipt from LIC on death of the insured person by the nominee of the insured is Capital receipt or Revenue receipt for under IT, Act ?
15 December 2008
It is a capital receipt which is exempt from income tax
Ravikumar.G
(Expert)
15 December 2008
Not taxable in the hands of nominee.
Ravikumar.G
(Expert)
15 December 2008
ONE of the basic principles to decide the taxability of a receipt under the Income-tax Act, 1961 is to distinguish between capital and revenue receipts. The distinction between the two is vital because capital receipts are exempt from tax unless specifically taxable — capital gains, for instance.
Conversely, revenue receipts are taxable unless expressly exempt in accordance with the provisions of law. The Act does not define `capital receipt' and `revenue receipt', but then one has to depend on the natural meaning of the concepts and also draw support from various case laws on the subject.
Conversely, revenue receipts are taxable unless expressly exempt in accordance with the provisions of law. The Act does not define `capital receipt' and `revenue receipt', but then one has to depend on the natural meaning of the concepts and also draw support from various case laws on the subject.
16 December 2008
Pl look into section 10(10D) of the Income tax act,1961 and see the conditions therein is satisfied to get exemption from tax.
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