Tax liability on copensation paid to Wife of Employee

[Pradeep Jain]

Dear Sir,

Our employee ( Operator ) was died  from Cancer . As per  agreement with Union , Company has to pay compensation  of Rs.  4 L to the wife of Employee . Is there is income tax liability on payment of the said amount.

Regards

Pradeep Jain

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above issue? If not please inform.

AI Summary

Taxability of death compensation: whether employer-paid settlement to a deceased employee's spouse constitutes taxable income. Whether a lump-sum compensation paid by an employer to the widow of a deceased employee under an agreement with the union is taxable as income in the hands of the wife; the query focuses on the payment's characterisation as taxable income versus non taxable compensation when made pursuant to an employment related settlement and the document records the factual context without a definitive resolution.