Taxability for sums received after death.

219 views

Skip to first unread message

AJAY AGARWAL

unread,

Jan 6, 2010, 9:09:47 AM1/6/10

to eserveonline

Mr.X is a salaried person, employed in private sector listed company.
He died in the month of October. He has received his salary (Total Rs.
110000/-) from April to October on monthly basis and in the month of
January (after Mr X death) his wife gets Rs.275000/- as ex gratia.
Company has deducted TDS of Rs. 32000/-. Now my query is
1. Whether Ex gratia received after the death of Mr X taxable in his
hands and if the same is taxable in the hands of Mrs X then is the
company correct in making TDS.
2. Should Mr. X be assessable on Rs. 110000/- or on Rs. 385000/-.

Pls support your answer with relevant case laws. It would support a
widow if early reply are given.

Ramaswami Kalidas

unread,

Jan 7, 2010, 1:24:06 AM1/7/10

to eserve...@googlegroups.com, pdrungt...@gmail.com

pl. note that vide Board Circular No.573 dated 21.8.1990 it has been clarified that any lump sum payment made gratituously or by way of compensation or otherwise to the widow or the legal heirs of an employee who dies while in active service is not taxable as income under the Income Tax Act,1961.The company was therefore wrong in subjecting the payment of Exgratia to TDS.They should refund the TDS to the widow of the deceased.
Mr.X the deceased will be assessable only on the income earned while he was alive.As Mr X is deceased,no assessment proceedings can be carried out agianst him as held by the Supreme court in CIT Vs.Amarchand N.Shroff (48ITR 59).
regards
kalidas

> Date: Wed, 6 Jan 2010 06:09:47 -0800
> Subject: e-Serve Taxability for sums received after death.
> From: pdrungt...@gmail.com
> To: eserve...@googlegroups.com