Interest on Compensation Assessed as Income from Other Sources; 50% Deduction Allowed Under Section 57(iv)
Interest received on compensation or enhanced compensation under Section 145B(1) is assessed as "Income from Other Sources" in the year it is received, according to Section 56(2)(viii) of the Income Tax Act. Taxpayers can deduct 50% of this interest under Section 57(iv), but no other deductions are allowed.
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