TDS

ramesh gupta (Querist) 09 March 2011 This query is : Resolved
Kindly advise about the TDS liability on exgratia payment to the legal heirs of an deceased employee by a company.

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Raj Kumar Makkad (Expert) 09 March 2011
No TDS is liable to be deducted out of such ex-gratia.

Guest (Expert) 09 March 2011
No TDS is liable to be deducted out of exgratia payment made to the legal heirs of an deceased employee, as it does not fall within the purview of Salaries as included in Sec.192 of the Income Tax Act.

B.Chakrapani Warrier (Expert) 10 March 2011
ex-gratia payment received by a person or his legal heir,from the central government/ state government/local authority/public sector undertaking, consequent upon injury to the person/death of a family member, while on duty,will not be taxable under the Income tax Act,1961
CBDT Circular 776 dated 8/06/1999 reported in 238 ITR(St)(20)
In view of exemption,TDS provisions does not attract on such payment.

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