Deduction of TDS from compensation granted by Court/Award
Shyam Ji Srivastava
(Querist) 04 February 2011
This query is : Resolved
Dear Members,
Whether TDS is compulsory where compensation awarded by Court by way of INTEREST in any decree?
e.g. The Consumer court directed to a development authority to refund the deposited amount alongwith interest @12%. The authority submitted cheque after deduction of TDS. Is it right in the eye of Law? Court verdict is that the interest awarded by way of compensation is not PROFIT>
Shyam Ji Srivastava
Senior Advocate
Advocate. Arunagiri
(Expert) 04 February 2011
Source may be different but it is a income, so TDS deduction is right.
A V Vishal
(Expert) 05 February 2011
Once interest is regarded as revenue receipt then it would fall within the mischief of section 4 of the Income-tax Act, 1961; therefore, TDS under section 194A of the Act is to be paid by the recipient in respect of the interest income on the delayed payment.
CASE LAW DETAILS
Decided by: HIGH COURT OF PUNJAB & HARYANA, In The case of: Karnal Singh v. State of Haryana , Appeal No.: CWP No. 21077 of 2008,
Decided on: August 13, 2009
Shyam Ji Srivastava
(Querist) 09 February 2011
Dear Members,
WITH DUE REGARDS I AM NOT SATISFIED WITH THE ANSWERS. IN A CSE DECIDED BY STATE CONSUMER DISPUTES REDRESSAL COMMISSION LUCKNOW HELD THAT NO DEDUCTION CAN BE MADE ON THE INTEREST AWARDED BY THE FORUM,ON DEPOSITED AMOUNTS. THIS JUDGMENT ALSO CONFIRMED BY THE NATIONAL COMMISSION.
THEREFORE PLESE CONFIRM AGAIN.
SHYAM JI SRIVASTAVA
ADVOCATE
