Income Tax liability for cheque over 20 lacs
This query is : Open
19 April 2011
My client was a director and shareholder in a pvt ltd company. My client wanted to leave the company because of mis-management of funds and improper working of other director (who is also the managing director). My client resigned from the directorship and also transferred his shares to this director. In return, my client was offered Rs. 20 lacs.
19 April 2011
What is the nature of compensation. Whether it is value of shares sold or compensation for leaving the company. In first case it will be capital gains depending on length of holding and in second case it will be income from other sources.
19 April 2011
Hi,
It was a compensation to settle the dispute i.e. compensation for my client for not to go to court against the other person.
It was a compensation to settle the dispute i.e. compensation for my client for not to go to court against the other person.
19 April 2011
I think it should be Income from other sources. Other expert views are welcome.
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