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2018 (3) TMI 1972 - PUNJAB AND HARYANA HIGH COURTTDS on interest received on the compensation - whether interest received by an assessee on the compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received? - Direction to present petitioner-Insurance Company to release an amount which was deducted as TDS and pay the same to the claimants. Further, it was ordered that the difference of interest amount of ₹ 333/- shall also be released to the claimants - HELD THAT:- At the first instance, the tax on the interest of compensation is to be deducted at source in the financial year, in which it is received. Secondly, in a case pertaining to interest on the compensation awarded by the Motor Accident Claims Tribunal, no tax is payable on the interest up to ₹ 50,000/- and beyond ₹ 50,000/- the tax is to be deducted source on the aggregate of the amount of such income paid during the financial year. The cases of the payment of compensation under the Workmen Compensation Act, 1923, are not covered under the said provisions. In such case, the appropriate remedy before the person concerned is to seek a refund from the Income Tax Department as permissible under the rules at time of filing of the return. However, since the Insurance Company had deducted the tax at source on the interest component, they cannot be directed to again pay the tax deducted at source to the claimants, since the same was lawfully deducted for the payment of compensation. It being so, the impugned order passed by the Commissioner, Employee's Compensation Act, 1923, Hisar, Circle at Hisar, is hereby set aside leaving the claimants to file income tax return and claim the refund, if permissible under the law.
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