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Taxability of lump sum payments: death-related gratuities or compensation to heirs are not treated as taxable income. The Board clarifies that lump sum payments made gratuitously or by way of compensation or otherwise to the widow or other legal heirs of an employee who dies while in active service do not constitute taxable income under the Income-tax Act, 1961 and are not subject to income taxation in the hands of the beneficiaries.
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Provisions expressly mentioned in the judgment/order text.
Taxability of lump sum payments: death-related gratuities or compensation to heirs are not treated as taxable income.
The Board clarifies that lump sum payments made gratuitously or by way of compensation or otherwise to the widow or other legal heirs of an employee who dies while in active service do not constitute taxable income under the Income-tax Act, 1961 and are not subject to income taxation in the hands of the beneficiaries.
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