What is the Treatment for a fire insurance claim received or entered in the books as receivable for the purpose of Income Tax,should it be taxed under PGBP or Any other head,and the year of taxability???
The loss has been accounted for in th Profit and Loss Account
As per Section 45(1A) any insurance claim received is taxable under the head capital gain
Hi Nikhil
It will be reduced from the WDV of the Block, if in relation to Fixed Asset/Capital Asset
Otherwise it will be a trading receipt u/s 41(1)
hi,
it will depend on the type of asset for which claim has been recd....
If it is for capital assets then subject to tax under capital gains head, if that asset forms part of a block then claim shall be reduced from wdv of the asset.....
If it is for stock etc then trading receipt
Insurance Claim Received/Receivable is just treated like you sold asset and if block of asset is nil at year end then short term capital gain applicable otherwise it shall be reduced from the block of asset,
if the asset is not business asset then normal provisions of capital gains will apply
Insurance claim received is not considered as a transfer but.. despite this it is taxable U/H Capital gains..
The amount of tax will depend on ur block of asset,,, whether the claim is received on entire block or part of a block.. The money received as claim will be treated as if the asset is sold.
Does anyoine have any case laws stating the year of taxability of insurance claim,i.e, stating that insurance claim shall be taxed in the year of granting the amount and not in the year of loss.
hiii,
The loss occured in PY.2011-12 of Rs. 50,00,000/-(Including Raw Material of Rs. 100000) by phailin cyclone . but we received claim from insurance company of Rs.45,00,000 (incld. Rs.800000/- towards Raw material) in the P.Y 2013-14. Can any body help me the tax impact on whole amount.
CAclubindia
