Sir
If a company deduct Liqudity damage from his supplier due late supply of goods as per contracts terms & condtion.
Is taxble or not in the hands of the company.
Please spacify with case laws if any.
Thanks
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Is liqudity damage is taxable in the hands of company
Replies (3)
Can any one reply sir
The Internal Revenue Service (IRS) treats liquidated damages as taxable income. Although damages for physical injuries and illnesses can be excluded from taxation, other lawsuit damage awards, including liquidated damages, are taxable, according to the Internal Revenue Code. The IRS requires recipients of liquidated damage awards to include them as income on their 1099-Miscellaneous Income forms.
Thank you for your valuable information Pradeep
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