Business Standard

CBDT reply on tax on solatium to victims sought

IANS  |  New Delhi 

The on Tuesday asked the Central Board of (CBDT) to consider if the provision that mandates deduction of tax on the interest accrued upon award or compensation, granted by the (MACT) to accident victims, can be quashed.

A Division Bench of Justice and Justice asked the CBDT to consider Amit plea and decide by June 30.

The court was hearing petition, which has sought quashing of Section 194A(3)(ix) of the Income Tax Act, 1961 (as amended up-to-date) that mandates deduction of tax from interest accrued upon the award and compensation granted by the MACT.

He has sought that the provision be declared unconstitutional as it is in direct conflict with the object and spirit of the Motor Vehicles Act, 1988.

"Hold that no authority can deduct TDS upon the interest accrued upon the award/ compensation awarded by the (MACT) under Section 194A(3)(ix) of Income Tax Act, 1961 and pass necessary directions to the respondents in this regard," the petition said.

He has sought directions to companies as well as banks not to effect tax deduction at source (TDS) upon such interest on compensation amount.

--IANS

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, April 16 2019. 16:20 IST
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