A woman received money from insurance company towards accident claim. Accident happened 7 years ago(2005). Insurance company went on appleal to district court where case was decided i favour of woman. Insurance Company appealed to High court where the case was decided in favour of woman in 2012. The court has also certified the woman with 60% diability.
Insurance amount to be received - Rs. 2,35,000
High court has ordered Insurance company to compensate wit interest @ 7.7% for 7 years. She has a salary income for AY 2013-14 Rs.3,60,000/- before Ch VI A Deduction. Assume she has LIC For Rs.1,00,000/-.
Please suggest
i) Whether accident claim is exempt , if so under which section?
ii) Interest on compensation receivable is taxable under Income from other sources. Whether payment made to advocated and incurred in legal proceedings can be claimed as expenditure against such interest?
iii) whether she can claim 80U benefit?
iv) Any other suggestions
Thanks in advance
CAclubindia
