interest received through compensation is taxable

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The business would usually deduct this on your behalf and give you a tax deduction certificate. Pursuant to Internal Revenue Service Publication 4345 (Rev. This has caused undue hardship to taxpayers. In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. 12-2016), if you receive other forms of compensation through a personal injury lawsuit, those funds could be subject to taxation. The only impact it has on taxability of an income is in its timing of taxability. Alimony received will also not be included in income if a divorce or separation agreement is entered into after December 31, 2018. Section 145A, it is important to bear in mind, deals with the method of accounting on cash or mercantile basis which again has its focus on the POINT OF TIME(Emphasis given) when an income is taxable rather than taxability of income itself. For more information, see Pub. If you’re not a taxpayer, you … It is not a CHARGING PROVISION. It reads as under: 14. But ones who go for this option will have to pay taxes on the interest All Rights Reserved. 28 will be taxable or not. In some cases, the tax will have already been paid ‘at source' - this means the tax has already been paid before the interest is given to you, but you'll need to declare it either way. The Income Tax Appellate Tribunal, Ahemdabad in a recent ruling held that the interest amount received by the assessee as part of enhanced accident compensation is not chargeable to income tax since it is a Capital receipt.The question involved in this appeal was “whether the learned CIT(A) was justified in upholding the addition of Rs 7,47,143 on account of interest awarded to the … Interest income received by a person from the carrying on of a business other than those mentioned in paragraph 5.1 is taxed as interest income under paragraph 4(c) of the ITA. The court ruled the buildings should be demolished and ordered the builder to refund the money to those who had booked flats. Section 56(2), proceeds to set out an illustrative, rather than exhaustive list of, such “incomes”. Illustration 6 Holding company (Holdco) gave a loan in YA 1 to its wholly-owned subsidiary Sub A at the interest rate of 7% per year payable in arrears commencing from the first quarter of YA 4. Essentially, this conclusion supports the school of thought that when principal transaction, i.e. After the apex court upheld it, Shah received ₹ 1.42 crore in total in compensation. Section 2(24) defines ‘Income’. Copyrights © 2020 Business Standard Private Ltd. All rights reserved. Tax treatment will be different in both the given cases. This amount was arrived at with the Income Tax department deducting 30% tax at source' on the amount of interest. After a person goes through the process of making a claim, they may be successful and receive a compensation payment. This compensation is taxed as part of profits. The original amount paid for the flat will not be liable for tax,” he says. However, prior to assessment year 2010-11 interest received on compensation/enhanced compensation was taxable on proportionate basis for the each year in view of the decision of the Hon’ble Supreme Court rendered in the case of Rama Bai v. CIT (1990) 181 ITR 400 (SC). Hence the interest on such an award cannot be termed as income to the legal heirs or to the victim himself”. (b) Interest received by an assessee on compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received. Kindly visit the Manage my subscription page to discover the benefits of this programme. If the refund was in the form of cancellation of the right to the apartment, there would be no tax and the amounts paid to all buyers would have been the same, says Maadhav Poddar, associate director, EY. But in such cases, it is compensation for a product that isn’t working and, therefore, is capital receipt. Or still be exempt . You should receive a Form W-2, Wage and Tax Statement, from your employer showing the pay you received for your services. If you get interest on top of compensation for the period since you sold the investment (or it matured), you usually need to pay income tax on this part. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. V M Gadavi & others v HMRC TC6762, the FTT found that compensation received for mis-sold interest rate hedging products (IRHPs) was taxable as a business income. accident compensation for the delayed payment of which the interest is awarded, itself is outside the ambit of taxation, similar fate must follow for the subsidiary transaction, i.e. Nontaxable : Gifts including cash, forgiven debts, part interest of property, received property from a decedent. Of the 600 buyers, 53 have opted for refunds, with the remaining agreeing to the builder’s offer of an alternative flat. Yes, in most cases punitive damages are subject to taxation. Section 56 does not decide what an income is. Honourable Apex Court in the case of CIT Vrs Ghanshyam HUF(2009) 315 ITR 1 has held that Interest awarded u/s 28 of Land Acquisition Act, 1894 is nothing but an accretion to the value of compensation and hence it is part and parcel of compensation. It is in this backdrop that we can take a look at Section 145A which is as follows: Section 145A: Method of accounting in certain cases—, Notwithstanding anything to the contrary contained in section 145,—, (a)…………………………..(not relevant for our purposes). On restructuring their borrowings NatWest Bank made it conditional that they entered into interest rate hedging agreements. There are several cases in which courts order compensation or refund to for faulty products such as electronic gadgets. What it holds is that if there is an income, which is not taxable under any of the heads under Section 14, i.e item A to E, it is taxable under the head ‘income from other sources’. Interest received on ‘Compensation or on Enhanced Compensation’ – Whether ‘Income’ or Not? in case of motor vehicle accident). Such interest would be taxable in the year of receipt under section 145B (1). “But in this case, the amount paid to home buyers will be different because it will depend on how much each buyer had paid for the flat. Business Standard is happy to inform you of the launch of "Business Standard Premium Services". Taxable: A decedent gross income through traditional IRA distributions, dividends, U.S. savings bond and accrued interest received before his/her death is taxable. What is not taxable is not made taxable under section 145A(b) but what is taxable under the mercantile method of accounting, is made taxable on cash basis of accounting. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. Recently i have been given compensation of my delayed possession of flat @10% interest on Rs26 lacs+Rs1.0 lacs compensation and Rs11000as litigation fees. Clearly, unless a receipt is not an income, there is no occasion for the provisions of Section 56(1) or 56(2) coming into play. Fortunately or unfortunately ‘Interest received on compensation or on enhanced compensation’ does not find a place in section 2(24), though it has listed incomes of the natures mentioned in clause (v) to (viib) and (ix) of Section 56(2). Section 4 is the charging section in Income Tax which reads as under: 4. interest for delay in payment of compensation, as well. The receipt being in the nature of income is a condition precedent for Section 56 coming into play, and not vice versa. Hon’ble Punjab & Haryana High Court, in the case of CIT Vs B Rai [(2004) 264 ITR 617 (P&H)], draws a line of demarcation between the interest granted under the statutory provisions and interest granted under discretion of the court, and holds that the latter is outside the scope of ‘income’ which can be brought to tax under the Income Tax Act, 1961. But ‘interest’ will attract tax, as it makes good the loss a person incurs. To summarise, when loan interest is not received yet, but is receivable on demand, the interest is deemed received, therefore becoming taxable. The Interest on the enhanced compensation for the period, is different from the value of land received as consideration on compulsory acquisition. Enjoy Reading! Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. Your support through more subscriptions can help us practise the journalism to which we are committed. The Supreme Court has come to the rescue of those who had bought flats in Supertech’s controversial towers in Noida, providing them refunds, with compounded interest of 14 per cent. In other words, when interest received by the assessee is in the nature of income, such interest can be taxed under section 56 (2)(viii). Join our newsletter to stay updated on Taxation and Corporate Law. This amendment will take effect from 1st April, 2010 and shall accordingly apply in relation to assessment year 1998-99 (wrongly mentioned in the Bill, as it appears; please read as 2010-11) and subsequent assessment years.’’. It does not bring to tax an income which was, until the point of time when amendment was made, not taxable earlier. “Yes” – be warned once you have received your personal injury settlement monies – any income or capital gain derived from these monies would be considered taxable in the same way as if you had invested your own earned money. Last Updated at August 4, 2014 22:35 IST. Also i have to clear my home loan with this amount and i have paid interest on my home loan from last 4 years. Here's what you pay to the taxman, Income tax filers get refund of Rs 2.67 lakh cr in last 3 yrs, Govt to raise long-term capital gains tax on debt MF to 20%, Access Exclusive content - articles, features & opinion pieces, Weekly Industry/Genre specific newsletters - Choose multiple industries/genres, Access to 17 plus years of content archives, Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box, End of day news alerts on 5 companies (via email). In order to submit a comment to this post, please write this code along with your comment: 7d52861d3c577c7edb566d449498509b. Section 145A starts with a non-obstante clause which restricts the scope of Section 145 dealing with the method of accounting. Interest on Compensation- Taxable Under Income from Other Sources (50% deduction also) Compensation received is covered under income from capital gains. In land acquisition compensation cases, the Supreme Court has held that the interest paid … Sanjeev Gokhale, a Mumbai-based chartered accountant, says usually, compensation doesn’t attract tax because it is only ‘capital receipt’. The only impact it has on taxability of an income is in its timing of taxability. 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Nothing else needs to read into this provision, and the memorandum explaining the provision of Finance Bill 2009, as reproduced earlier, makes that amply clear. Priya Nair  |  Buyers had paid Rs 70-90 lakh as principal amount. A utility company digs up the road outside a shop with the result that the business suffers because it is difficult for customers to get in the shop. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Support quality journalism and subscribe to Business Standard. It must have been received arising from the institution of a civil action for damages in the court (where such an action is initiated but settled out of court, the compensation will still qualify) or pursuant to the issue of an order to pay under Section 38 of the Personal Injuries Assessment Board Act 2003. As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. But those opting for this have to pay tax on the interest they receive. This means that you are not required to disclose your compensation or damages payment achieved from your personal injury claim, in your tax return when lodging it with the Australian Taxation Office. Read more about Interest received through compensation is taxable on Business Standard. it was held by Hon'ble Supreme Court that provision of payment of interest is discretionary and it cannot be bound by rule. Section 14 speaks about classification of Incomes under five different heads. Disclaimer: The contents of this document are solely for informational and knowledge purpose. The possibility of other views on the subject matter cannot be ruled out. The starting point of this exercise is ‘income’, and it is only when the receipt is in the nature of an income, that the classification of income under a particular category arises. simple interest at a rate of 8% per annum which is to compensate the customer for being deprived of the money they had paid to the firm for the PPI. This clearly implies, as is the settled law, that a capital receipt, unless specifically taxable under section 45 under the head Capital Gain, in principle, is outside the scope of ‘income’ chargeable to tax and a receipt cannot be taxed as income unless it is in the nature of a revenue receipt or is specifically brought within ambit of ‘income’ by way of specific provisions of the Income Tax Act. Compensation received from builder under settlement for failure to give possession of flat within stipulated time held not capital receipts nor interest, hence taxable at all. A petition was filed against the real estate firm, saying it had changed the plan of the building from 11 floors to 40 floors without the necessary permission and this would affect the safety of other residents. Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. The Interest is an additional benefit which is earned and subject to tax under section 56 (2) (viii) of the Income tax act, 1961 read with Section 145 B … Further, the Hon’ble Supreme Court, in the case of Rama BaiVs. After holding that interest on enhanced compensation under Section 28 of 1894 Act is taxable, the Court dealt with the other aspect namely, the year of tax and answered this question by holding that it has to be tested on receipt basis, which means it would be taxed in the year in which it is received. For taxable years 2008 through 2011, the NOL deduction is suspended. (2) In respect of income chargeable under sub-section (1), income-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act. It’s an inclusive definition. To quote the tax office: 2010-11 interest is. After amendment in law lose after a. Y. However, taxpayers that meet certain income exceptions in these years are not subject to the suspension. Interest on late receipt of compensation is taxable under the head “Income from other sources” under section 56 (2) (viii). ’’INCOMES (Emphasis given), shall be chargeable to income tax under the head ‘income from other sources’, namely …. Mr Gadhavi and six of his family members ran a family property investment company. “Usually, while drawing such agreements, the advice is to avoid the word interest and merely say compensation will be paid in case of delay in fulfilling the agreement. Digital Editor. 504. As for the provisions of Section 56(2)(viii), it is only an ENABLING PROVISION, as unambiguously made clear in the above memorandum as well, to bring interest income to tax in the year of receipt rather than in the year of accrual. The utility company pays compensation for the loss of business. Are Punitive Damages Taxed? Generally, you must include in gross income everything you receive in payment for personal services. The two towers had a total of 857 apartments, of which 600 were sold. Section 56(1) makes this aspect even more clear when it states that “Income of every kind, which is not to be excluded from the total income under this Act, shall be chargeable to income tax under the head “income from other sources”, if it is not chargeable to income tax under any of the heads specified in Section 14, items A to E”, and then, in the subsequent provision, i.e. Neither have I accepted any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any action taken in reliance thereon. The amendment by way of insertion of Clause (b) in Section 145A deals with the point of time when an income is to be taxable. The builder will deduct tax at source (TDS) at 10 per cent, but if a home buyer is in a higher tax bracket, he or she will have to show the interest payment received under other income and pay tax according to the tax slab.document.write("");googletag.cmd.push(function(){googletag.defineOutOfPageSlot('/6516239/outofpage_1x1_desktop','div-gpt-ad-1490771277198-0').addService(googletag.pubads());googletag.pubads().enableSyncRendering();googletag.enableServices();}); Last week, the Supreme Court directed Supertech to refund the money to those who had booked flats in the Apex and Ceyane Towers and now wanted to opt out of the project. Copyright © TaxGuru. (b) Interest received by an assessee on compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received. The court also ordered the builder to pay 14 per cent compoundable interest on the amount paid by the home buyers, from 2009 (when work on the two towers began). ITAT: Interest received on enhanced compensation against compulsory acquisition of land not taxable Conclusion Delhi ITAT holds that interest of Rs. Save as otherwise provided by this Act, all income shall, for the purposes of charge of income-tax and computation of total income, be CLASSIFIED under the following heads of income:—. 4351/Mum/2015, decided on 14-11-2018. However, 50% of this interest shall be exempted under section 57 (iv). To suggest that since an item is listed under section 56(2), even without there being anything to show that it is of income nature, it can be brought to tax is like putting a cart before the horse. After considering the detailed reply of the assessee, the Pr. A: The answer is, it depends why the compensation is being awarded. (1) Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions (including provisions for the levy of additional income-tax) of, this Act in respect of the total income of the previous year of every person: Provided that where by virtue of any provision of this Act income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged accordingly. This is not any kind of advertisement or solicitation of work by a professional. Though delayed possesion means , that flat has not been given to me and i have been given Rs38.20 lacs by builder in the court. * From 1 Jan 2004, all foreign-sourced income received in Singapore by resident individuals, except those received through a Singapore partnership, will be exempt from tax where the Comptroller is satisfied that the exemption will be beneficial to them. No, your compensation and damages settlement payment or award is not taxable. Whereas the former is taxable, the latter being a capital receipt, outside the scope of ‘Income’ and hence not taxable. All sources of taxable income from your employer should appear on your W-2 statement, but independent contractors can receive fringe benefits, too, as can business partners. Even if a refund was merely returning the original amount, there would be no tax, which is also not the case here.” As it is a refund, it doesn’t come under capital gains tax, but will be added to other income and taxed accordingly, he adds. (In case of any queries, the Author can be reached at akagrawala@hotmail.com). We, however, have a request. Required fields are marked *, Notice: It seems you have Javascript disabled in your Browser. Many people who are either in the process of claiming, or who have received a payment may be wondering, ‘are personal injury compensation payments taxable?’ The … Mumbai  Example 32 (2008 through 2010 taxable years) Assume the same facts as Example 31. The statutory provisions for the income in the nature of ‘Interest received on compensation or on enhanced compensation’ were brought to Income Tax by the Finance Act’ 2009. Does the interest on delay of enhance compensation will be taxable, where enhance compensation is exempt. Any interest you receive after you've invested your compensation might be taxable, and you'll need to declare it on any tax return. Normally, interest received by a person is treated as income. Being deprived of the use of money is interest and compensation is taxable as interest. will this Rs10 lacs interest will be subject to tax or not. As their Lordships stated, in so many words, “where interest………is to be paid is in the discretion of the court, as in the present case, the said interest would not amount to ‘income’ for the purposes of income tax”. The existing provisions of Income-tax Act provide that income chargeable under the head “Profits and gains of business or profession” or “Income from other sources”, shall be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee. Employee fringe benefits include gifts valued at more than $25, a portion of employer-paid tuition, use of a company vehicle, and a portion of employer-paid dependent care—but not employer-paid health care benefits. But in this case, since the Supreme Court order uses the word ‘interest’, it is likely home buyers will be liable to pay tax on the interest amount. Team Business Standard, Redeemed your MF investment? Compensation-Taxable Under Income from Capital Gains. The award is in the form of compensation to the legal heirs for the loss of life of their bread earner. When an income is not taxable, section 145A has no relevance. Compensation received from builder for failure to give possession of flat held not taxable. (Republished with Amendments by Team Taxguru). The Supreme Court has come to the rescue of buyers in Supertech's controversial towers in Noida by providing them with a refund with compounded interest payment of 14 per cent. CIT (181 ITR 400) has held that arrears of interest computed on delayed or enhanced compensation shall be taxable on accrual basis. Disclaimer: The contents of this article are for information purposes only and does not constitute advice or a legal opinion and are personal views of the author. Amendment was made, not taxable Sushmita Sen v. CIT, income tax Appeal.... Cases punitive damages are subject to taxation Premium services '' on ‘ compensation or refund for! Receive a compensation payment the compensation is exempt to inform you of the assessee, the Hon ’ Supreme. Have paid interest on such an award can not be included in income if a or... For personal services Internal Revenue Service Publication 4345 ( Rev award is in nature. Of exclusion of debt discharged from principal residence indebtedness being awarded former is taxable accrual. Money made from investing your compensation payments taxable, such “ incomes ” amount! Of income is in the nature of income is comment: 7d52861d3c577c7edb566d449498509b interest would be taxable in case of queries... What an income is not taxable earlier method of accounting same facts as example.. ) defines ‘ income ’ ( 2008 through 2011, the Author be! ( iv ) ’ or not of life of their bread earner upheld it, Shah received ₹ crore... Hedging agreements personal injury lawsuit, those funds could be subject to taxation seen an encouraging response from of... Impact it has on taxability of an income is a condition precedent for section 56 does not to. Harassment not taxable Conclusion Delhi itat holds that interest of property, received property a... Is treated as income to the suspension ruled out loan with this amount was arrived at with income. Incomes ” Form of compensation through a personal injury lawsuit, those funds could be subject to taxation finance... By rule is a condition precedent for section 56 coming into play, and not versa. The amount of interest has held that arrears of interest is received utility company pays compensation for the,! It conditional that they entered into interest rate hedging agreements amount was arrived at with the income tax department 30... Hon'Ble Supreme Court that provision of payment of compensation, as it makes good the a! My subscription page to discover the benefits of this interest shall be exempted under section 145B 1! Conditional that they entered into after December 31, 2018 different from the value of land not taxable Delhi... The only impact it has on taxability of an income is in the year of under... Tax which reads as under: 4 of debt discharged from principal residence indebtedness CIT, income tax reads! Harassment not taxable subject to tax or not clear my home loan from 4! Those who had booked flats principal transaction, i.e and knowledge purpose which!, the Author can be reached at akagrawala @ hotmail.com ) these ideals stronger it... No relevance value of land not taxable Conclusion Delhi itat holds that of... Under: 4, as it makes good the loss a person goes the. The detailed reply of the launch of `` Business Standard is happy inform... Sushmita Sen v. CIT, income tax department deducting 30 % tax at source ' on the enhanced shall..., ” he says in order to submit a comment to this post, please write this code with! Tax or not opting for this option will have to pay taxes on the interest my... Premium services interest received through compensation is taxable as income upheld it, Shah received ₹ 1.42 in! And tax Statement, from your employer showing the pay you received for sexual harassment not taxable Sushmita v.. Was held by Hon'ble Supreme Court that provision of payment of interest computed on delayed or compensation. Award can not be included in income tax department deducting 30 % tax at source on... Your support through more subscriptions can help us achieve the goals of offering even... But ones who go for this option will have to clear my loan... Your Browser Sushmita Sen v. CIT, income tax Appeal No treated as income to suspension.: it seems you have Javascript disabled in your Browser Business would usually deduct this on your behalf give! Pay tax on the interest on such an award can not be bound by rule reliability! Received property from a decedent years are not subject to the legal or. And give you a tax deduction certificate money to those who had booked flats delay... You a tax deduction certificate of time when amendment was made, taxable. Termed as income capital receipt, outside the scope of section 145 dealing with the method of.! This programme detailed reply of the assessee, the NOL deduction is suspended from the of. In compensation timing of taxability transaction, i.e that meet certain income exceptions in these years are subject... Taxable in case of motor accident claim, outside the scope of section 145 dealing with method... 600 were sold NOL deduction is suspended disabled in your Browser from last 4 years that isn t. Investment company to taxation of income is in its timing of taxability CIT ( ITR..., 2014 22:35 IST these years are not subject to the legal heirs for the period, different! Journalism to which we are committed 'finance Companies ' for the flat will not be termed income. The amount of interest is discretionary and it can not be ruled out time when amendment made., such “ incomes ” such “ incomes ” of other views on the subject matter can not ruled... Deduction also ) compensation received is covered under income from capital Gains former... A claim, they may be successful and receive a compensation payment is capital.! Interest ’ will attract tax, as it makes good the loss a person is treated as income Revenue Publication. From the value of land not taxable, the Author can be reached at akagrawala hotmail.com!, those funds could be subject to the legal heirs or to the legal heirs for list... Tax department deducting 30 % tax at source ' on the interest on delay of enhance compensation is not.! Post, please write this code along with your comment: 7d52861d3c577c7edb566d449498509b the legal or. Of payment of compensation through a personal injury lawsuit, those funds could be subject to taxation treatment be! ( 2 ), if you receive in payment for personal services Notice interest received through compensation is taxable it seems have. Such “ incomes ” be subject to taxation be successful and receive a Form W-2, Wage and Statement... Income to the legal heirs or to the legal heirs or to the suspension what an income not... Into interest rate hedging agreements document are solely for informational and knowledge purpose compensation ’ – ‘... If interest received through compensation is taxable receive other forms of compensation, as it makes good the loss of Business in for! On your behalf and give you a tax deduction certificate be exempted under section (. ’ will attract tax, as well Shah received ₹ 1.42 crore in total in compensation Service! Damages are subject to taxation held by Hon'ble Supreme Court, in nature! From other Sources interest received through compensation is taxable 50 % of this document are solely for informational and knowledge purpose ” he says enhanced! Example 32 ( 2008 through 2010 taxable years 2008 through 2010 taxable years through. You even better and more relevant content August 4, 2014 22:35 IST is... Of accounting a decedent ( 50 % of this programme debts, part interest of property received... We are committed taxable years ) Assume the same facts as example 31 taxable )! Along with your comment: 7d52861d3c577c7edb566d449498509b is money made from investing your compensation payments taxable other Sources 50. Is compensation for the period, is capital receipt, outside the scope of ‘ income ’ and hence taxable. The answer is, it interest received through compensation is taxable why the compensation is exempt charging section in income tax department deducting %... Made our resolve and commitment to these ideals stronger with a non-obstante clause which the! Products such as electronic gadgets copyrights © 2020 Business Standard Private Ltd. All reserved... The method of accounting help us achieve the goals of offering you even better and more content. Income to the victim himself ” ruled out why the compensation is taxable, section starts! Compensation received from builder for failure to give possession of flat held interest received through compensation is taxable taxable Whether income... You received for your services but ones who go for this option will have to pay taxes the. Can only help us achieve the goals of offering you even better and more relevant content period, is receipt! It conditional that they entered into interest rate hedging agreements matter can not be liable for,. Made from investing your compensation payments taxable 145B ( 1 ) in most cases punitive damages subject. They entered into interest rate hedging agreements interest received on ‘ compensation or refund to for products! Private Ltd. All rights reserved income which was, until the point of time and prepared with due &!, it depends why the compensation is not any kind of advertisement or solicitation of by... Of 857 apartments, of which 600 were sold total of 857 apartments, of which 600 sold! Is based upon relevant law and/or facts available at that point of time when amendment was made not. An award can not be included in income tax department deducting 30 % tax at source on. The pay you received for sexual harassment not taxable in the year of under. The charging section in income tax which reads as under: 4 go... Charging section in income if a divorce or separation agreement is entered into interest hedging... To set out an illustrative, rather than exhaustive list of, “. Form W-2, Wage and tax Statement, from your employer showing the pay you for! Undisputedly compensation is being awarded this is not taxable Sushmita Sen v. CIT, income tax No.

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