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2021 (1) TMI 890 - HC - Income TaxIncome tax on the compensation payable to the claimants - As submitted that in spite of deduction of income tax from source as the deceased was salaried person, the law mandates further deduction of income tax on the total amount of compensation also - HELD THAT:- It is well established principle of law that while awarding compensation, amount of income tax, if payable, has to be deducted while assessing the loss of dependency. In case the income of the victim is only from "salary", the presumption would be that the employer under Section 192(1) has deducted the tax at source from the employee's salary. In case if an objection is raised by any party, the objector is required to prove by producing evidence such as LPC to suggest that the employer failed to deduct the TDS from the salary of the employee. There can be cases where the victim is not a salaried person i.e. his income is from sources other than salary, and the annual income falls within taxable range, in such cases, if any objection as to deduction of tax is made by a party then the claimant is required to prove that the victim has already paid income tax and no further tax has to be deducted from the income. In the present case, the learned counsel for the appellant did not dispute that there was no evidence on record to show that no income tax was deducted at source while paying salary to the deceased; but, her contention was that the amount of income tax was required to be deducted again from the total amount of compensation payable. This is wholly misconceived plea inasmuch as once the income tax is deducted at source while making payment of the salary to the deceased employee, no law requires deduction of the income tax again on the amount of compensation.
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