Applicability of TDS on payment made by Insurance Company to Motor garadges (Cashless Claim)

[Sandeep Kumar]

Clarification is needed that whether insurance companies need to deduct TDS out of payment made to Motor garages specifically in respect of Cashless claim ?

AI Summary

Debate on TDS Deduction for Insurance Payments to Garages: Capital vs. Revenue Receipts for Taxability A discussion on whether insurance companies need to deduct Tax Deducted at Source (TDS) on payments made to motor garages for cashless claims. One reply highlights that the taxability of compensation depends on whether the receipt is capital or revenue. If compensation is for permanent disablement, it is considered a capital receipt and not taxable. However, if the disablement is temporary, the claim is taxable. Another query raises whether TDS should be deducted when payments are made directly to motor workshops instead of the insured individual.