Tax on compensation


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Querist : Anonymous

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Querist : Anonymous (Querist)
19 February 2016 A person have suffered permanent injury in motor accident.
he has been awarded compensation by order of court for the convicted party (lorry driver) after 10 years.
the total compensation consists of two components 1) Actual Compensation 2) Interest on same.

Please guide on tax implication of same.

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Guest

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Guest (Expert)
19 February 2016 It is not taxable - can be argued as capital receipt. Do not worry

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Querist : Anonymous

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Querist : Anonymous (Querist)
19 February 2016 Thank you sir,

Even Interest component will be tax free??

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Guest

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Guest (Expert)
19 February 2016 we can claim interest part as capital receipt too. It is going to be difficult but there is good case


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