Tds on insurance claim in bike showroom, Income Tax

[SANJAY NAYAK]

Dear Sir

I want to know how to treat tds on insurance claim on bike reparing. Kindly suggest

Thaking You

Regards

S K Nayak

Posts / Replies

[Ganeshan Kalyani]

Please explain a bit more to understand to give suitable reply.

[SANJAY NAYAK]

Dear Sir

I am accountant of a bike showroom who is dealer of HERO MOTOCORP LTD. The insured vehicle which comes for repair under insurance claim the insurance company deduct 1% tds on insurance claim payable then rest deposit in Bike shoowroom account . Bike showroom returns the same to the insured person or repair with same. But my question why insurance company deduct 1% tds on the above and under which section. Please clarify above

Thanking You

Regards

S K Nayak

[Ganeshan Kalyani]

In my view compensation is not subject to TDS on the condition that there is no interest element. Tds is only applicable on interest received for delay in receiving compensation. you may ask the insurance company on what basis they are deducting Tds. Further I understand that you are transferring the same amount received from insurance company to the insured. you do not have any profit built in it.

[MARIAPPAN GOVINDARAJAN]

You can ask the Insurance about the nature of deduction of tax and take action accordingly.

[Ganeshan Kalyani]

Hope your query is resolved.