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Compensated for accident? Pay your tax
RelaxWithTax
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February 23, 2006
You have a question about house rent allowance, medical allowance, or even a general tax query.

Here's where we step in with our experts, Relax With Tax.

Got a question for Relax With Tax? Please write to us!  

Imagedonated some amount to an organisation.

 How must I claim a tax rebate on that?

 My company did not give me the option to declare it under 80G.

 - Nitsy

Employers are given restricted powers when it comes to allowing exemption on account of donations made by employees.

Hence, it may be possible that you may have made the donation to an organisation that is not covered by the eligible list available to employers.

In such circumstances, you would need to claim the deduction independently in your income tax return.

You would need to ensure you attach the original receipt of such donations along with the return.

Is compensation received from the Motor Accident Claim Tribunal due to an accident viewed as taxable income?

Or, is exempt from tax under the Income Tax Act.

- Ram Narayan

Compensation received on account of an accident is not specifically listed as an 'exempted income'.

Hence, it may be taxed under the head 'Income from Other Sources'.

Incidentally, the various heads of income are:

i. Salary

ii. Income from house property

iii. Profits and gains of business or profession

iv. Capital gains

v. Income from other sources

Got a question for Relax With Tax? Please write to us!

Note: Questions may be edited for brevity. Due to the tremendous response, all queries will not be answered.

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Illustration: Dominic Xavier


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