Is TDS applicable on compensation?

Is TDS applicable on compensation paid?

Any person, who is responsible for paying to a resident, any sum, being in the nature of compensation or the enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land) …

Do I pay tax on a compensation payout?

Any element of a damages or compensation payment that represents interest will be taxable as income for income tax purposes.

Is compensation tax free?

Compensation for personal suffering and injury is exempt from capital gains (and income) tax. The exemption applies to ‘compensation or damages for any wrong or injury suffered by an individual in his person or in his profession or vocation’.

On which income TDS is not applicable?

But no TDS has to deducted if the person making the payment is an individual or HUF whose books are not required to be audited. However, in case of rent payments made by individuals and HUF exceeding Rs 50,000 per month, are required to deduct TDS @ 5% even if the individual or HUF is not liable for a tax audit.

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Is compensation taxable in India?

Any income (i.e compensation amount – actual cost of such asset) arising on such compulsory acquisition is taxable under the head capital gain. [Section 45(5)]. … Many a time interest is allowed on amount of such compensation or enhanced compensation.

What is the amount deductible from interest on compensation?

In clause (iv) to section 57, deduction of fifty per cent is provided on interest received on compensation or enhanced compensation.

Is compensation considered income?

Employee Compensation

Generally, you must include in gross income everything you receive in payment for personal services. In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options.

Is personal injury compensation taxable income?

In NSW, personal injury compensation is paid through the CTP (Compulsory Third Party) insurance scheme. … Both physical and psychological injuries can qualify for a personal injury compensation claim.

Do you pay tax on injury settlement?

If you receive a settlement for personal physical injuries or physical sickness and did not take an itemized deduction for medical expenses related to the injury or sickness in prior years, the full amount is non-taxable. Do not include the settlement proceeds in your income.

What if TDS is not deducted?

Penalty for companies for not depositing or not deducting TDS on time. The employer can make the interest payment on such late payment of TDS before filing TDS returns or demand raised by TRACES. Also, the interest paid delay while depositing TDS is not allowed as an expense under the income tax provisions.

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What is TDS and types of TDS?

TDS rates and types (Rates and limits as per Budget 2016)

Section Number Source TDS Rate
192 Salary Payment Rates of Income Tax in force.
193 Interest on securities 10%
194 Deemed Dividend 10%
194A Interest excluding interest on securities. 10%