Taxability on compensation received

Tax queries 4921 views 2 replies

Rajesh D. Sarfare

Article Clerk

27 Points Posted on 09 July 2010

Dear all,

I have an query about taxability on compensation received by an individual.

Case:- Mr.A (member of Soc.)did contract with ABC ltd(construction co.) for restructuring of his building and Building is restructure by contractor within particular period.After few days a part of restructure building collapse which cause dead of two people who are family members of Mr.A.

Mr.A got compensation for such cause.

Now my question is whether this is taxable in the hands of Mr.A u/s 28(ii)(c) which states that the compensation is taxable irrespective of revenue receipt or capital receipt.

thanking you all and I would be very happy if i can get any supreme court judgment for such case/s a

Replies (2)

Amir

Learner

4016 Points Posted on 09 July 2010

Dear Rajesh,

The same is not covered by Sec 28(ii)(c) because the said payment was not made for the termination or modification of the terms.

any compensation or other payment due to or received by—

(c) any person, by whatever name called, holding an agency in India for any part of the activities relating to the business of any other person, at or in connection with the termination of the agency or the modification of the terms and conditions relating thereto;

Next question, What will be the tax treatment of such death compensation?

Well, I don't know whether the same will be taxable or not but I could not find anything to prove that it will not be taxable........

I feel if it is taxable then Law is harsh to tax a death compensation as income.....:(

Guest

dear friend

i also don't have any judgement in this regard.in my opinion this amount will be taxable.i don't think this amount will be exempt.i think this amount will be taxable under capital gain.but wait for other replies.

regards

tarun rustagi