15 May 2012
A person received compensation for Land Acquisition by the Govt. He was not satisfied with the amount of compensation received. He filed a suit against the Govt for enhancement of compensation. The court ordered him to deposit the amount received as Original Compensation in a Nationalised Bank, preferably SBI, in the name of DISTRICT JUDGE, XYZ (CITY). Whether the Bank is liable to deduct Tax on the interest of above mentioned FDR. If yes, whose tax liability would be this ?
15 May 2012
IN this case if the interest shall be paid to the Court, then tax shall not be deductible. I am not talking on the basis of any section, but practicle knowledge. I have come across such cases where FDR is in the name of District Magistrate but bank has not deducted tax.
However, if the interest is to be received by the depositor, then yes there should be TDS and tax liability is of the depositor.
15 May 2012
IN this case if the interest shall be paid to the Court, then tax shall not be deductible. I am not talking on the basis of any section, but practicle knowledge. I have come across such cases where FDR is in the name of District Magistrate but bank has not deducted tax.
However, if the interest is to be received by the depositor, then yes there should be TDS and tax liability is of the depositor.
15 May 2012
This is not an income of the Distric Judge, but of the assessee and he is liable to offer the same to tax. The tax is deductible in the amount of interest so accrued.
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