TaxTMI 
TaxTMI 
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
Tax liability on copensation paid to Wife of Employee
16 May 2014 
1 Reply 
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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. (AI Summary)
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. (AI Summary)