Taxability of consultancy income received after filing a suit in the court settled after 15 years

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This discussion addresses the tax implications of consultancy income received after a lengthy 15-year court settlement. The user received consultancy fees with TDS deducted, but payment was delayed until a recent court resolution. The query focuses on how to report this income, especially since TDS was already paid and filed for the original financial year. It also explores the taxability of interest received and the possibility of claiming legal expenses incurred during the protracted legal process.

KV Venkateswaran

KV Venkateswaran (Querist)
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04 May 2024 I worked as an IT consultant and TDS was deducted on the consultancy fees and the TDS certificate was issued to me.

The net of TDS consultancy fees was not paid to me and therefore I filed a suit in 2011.
In 2024 February the matter was partly settled by the court after 13 years.

The court fees was also received and interest received at 6 % on the settled arrears.
1. Under which section should I report this and get tax exemption,since TDS is aready paid and filed by me.
2.How do I show this amount which is received in the current financial year but is for fy 2008-09
and TDS deducted and tax returns filed by me. I have spent amounts on legal charges and other expenses on several visits to the court. Can I claim these expenses ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 May 2024 Presuming you had previously filed ITR relevant to FY 2008-09 with total receivables as per TDS deduction, no need to declare the income again. Only declare interest amount received in current year.
Any amount spent on legal charges cannot be deducted now, except amount spent specifically for the interest income.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 September 2024 Good Luck.

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