Accident compensation sum and the interest awarded to a victim cannot be treated as income as defined under the Income Tax Act, Madras high court has said, adding, "social welfare legislation should prevail over taxation legislation."
Justice M V Muralidaran, passing orders on a petition filed by Tamil Nadu State Transport Corporation (Salem), said:
"The question is whether the provisions of Income Tax Act, 1961, and more specifically, whether the compensation awarded by Motor Accident Claims Tribunal (MACT) to the victim can be classified as a taxable income under the income tax law?
The answer to this question in the opinion of this court is in the negative."
Source: Times of India
Justice M V Muralidaran, passing orders on a petition filed by Tamil Nadu State Transport Corporation (Salem), said:
"The question is whether the provisions of Income Tax Act, 1961, and more specifically, whether the compensation awarded by Motor Accident Claims Tribunal (MACT) to the victim can be classified as a taxable income under the income tax law?
The answer to this question in the opinion of this court is in the negative."
Source: Times of India
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