My client received a cheque of Rs. 20 lacs for settling a dispute with his partners in a pvt ltd company. Will this cheque be under preview of Income Tax.
Thanks in advance
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IT for cheque of Rs. 20 lacs
Replies (2)
Alok,
Before any comment is made on this post, it is important to know the nature of settlement. It may be remembered that all financial transactions are under the scanner of ITD.
To check on taxability, we have to know the nature of transaction. If it is of revenue nature, certainly it gets taxed ! in case of Capital transaction, we have to see whether the conditions given in charging section is attracted.
Looking forward for more clarity from you.
CA Vishwas Aradhya | +91 95913 18000
Bangalore
Agreed with Vishwasji. It all depends on the nature of settlement between the Directors of the Co.
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