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Taxability of interest on accident claim

sajith gopinath (29 Points)

23 December 2020

Is interest received on accident claim is taxable, on which Tax deducted and paid by the insurance company?

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Krishna Chaudhary (Accountant) (4531 Points)
Replied 24 December 2020

Provisions for tax deduction at source (TDS) on interest on motor accident claims stipulates that no TDS is to be deducted on interest accumulated up to a sum of Rs. 50,000 during one year. This provision directly implies that if interest earned is more than Rs. 50,000, TDS is applicable in such cases.
it will taxable under in other sources