however payments made to any Assessee in connection with the Bhopal gas leak disaster to the extent he has been allowed a deduction under the act on account of any loss or damage caused to him by such disaster will not be exempted.
what that means?
If full amount received it is not exempted or if amount received above the loss is not exempted?
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Payments to Bhopal gas victims
Replies (1)
The rule is not about whether you received "full" or "partial" compensation; it is about whether you previously claimed a tax deduction for the underlying loss.
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If you never claimed a tax deduction for the loss: The entire compensation is typically exempt.
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If you did claim a tax deduction for the loss: Only the portion of the compensation equal to the deduction you already received is taxable (to "recover" that tax benefit). Any compensation received above that amount remains exempt.
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