Taxation ipcc
This query is : Resolved
09 January 2019
Monetary compensation for a loss, detriment, or injury to a person or a person's rights or property, awarded by a court judgment or by a contract stipulation regarding breach of contract
As per rule of income tax, all revenue receipts (unless specifically exempted by the IR Act) are taxable under the provisions of the IT Act and all capital receipts (unless made specifically taxable by the Act) do not constitute income chargeable to tax.
The terms ‘capital’ and ‘revenue’ have not been defined in the IT Act and various courts have held that the nature (capital or revenue) of compensation for breach of contract / liquidated damages would depend on the facts of each case.
Monetary compensation for a loss, detriment, or injury to a person or a person's rights or property, awarded by a court judgment or by a contract stipulation regarding breach of contract
As per rule of income tax, all revenue receipts (unless specifically exempted by the IR Act) are taxable under the provisions of the IT Act and all capital receipts (unless made specifically taxable by the Act) do not constitute income chargeable to tax.
The terms ‘capital’ and ‘revenue’ have not been defined in the IT Act and various courts have held that the nature (capital or revenue) of compensation for breach of contract / liquidated damages would depend on the facts of each case.
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