Is it insurance claim received taxable

Hiii,

It is compansation of damages i.e. death and consider as capital receipt.It is not taxable.

Any sum received can be taxed under the Income-tax Act, 1961 (the Act), if the same is covered within the meaning of the word "income" . Technically speaking, the life insurance claim received by the family cannot be said to be income in the hands of the recipient . Further, this payment is also not being made to compensate for the loss of a particular source of income, but is being made for the loss of source itself. Even otherwise, the Act contains a specific provision, i.e., section 10(10D) which specifies that any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy, is not to be included within the meaning of "income" . Therefore, the life insurance claim receipts are not taxable in the hands of the family of the deceased. 
 

Please don't consider the section 10(10D) (just referred for example). Here the point - claim received is capital receipt, so it will not be includible in income of the representative assesee.

Please refer the below mentioned case laws, it may help

Vinod Kumar. vs Income-Tax Officer32 ITD 254 , ITAT Chandigarh 

CIT v. Chiranji Lal Multanimal Rai Bahadur (P) Ltd

If we are considering the claim receipt as capital income, then it will not form part of our total income. In that case, income will be nil or less as the case may be. Then excess TDS can be claimed from the dept.

We are having background case studies & other supporting documents.

In many scenarios, we will claim TDS refund since our income will not be taxable but TDS will be deducted. In all those cases, notice will not be served to the assessee.

Even in our case, may be chances are there that we will receive notice. In that case, we need to explain the AO regarding our assumption & provide supportings in order to substantiate the same.

Thanks

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