One of my client has received a sum of Rs.1 lac from Govt. as her husband died during employment. Earlier government was offering job but now only compensation is being given. So I need advice whether this compensation is taxable or not.
Thanks in advance
Regards,
Harsh Shah
1 Replies
CA Sunil Kumar
(Chartered Accountant)
(4524 Points)
Replied 21 June 2018
compensation received by the heirs of the deceased employee from his employer is concerned, the CBDT, through circular No, 573 dated August 21, 1990, has clarified that a lump sum payment made gratuitously or by way of compensation or otherwise, to the widow or other legal heirs of an employee, who dies while still in active service, is not taxable as income under the Income-Tax Act, 1961.
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