Taxability of Income received from bank

[satbir singhwahi]

Can Amount received on one time settlement with bank , be taxed as income .

[Rama Krishana]

All depend upon the nature of transaction, the issue behind the settlement. Whether the issue related to revenue transaction or capital transaction. For more details, you may refer to the following case law: 2008 TMI - 30879 - HIGH COURT DELHI

[DEV KUMAR KOTHARI]

Your query is not clear. Amount received on one time settlement with bank - in OTS bank receives money and not the customer. I believe you are seeking clarity in case of bank and not customer of bank. Interest recovered in OTS , if not taken as taxable income will be taxable on receipt. Amount recovered on a/c of principal will not be taxable, unless it was allowed as bad debt/ loss earlier.

AI Summary

Taxability of Income from One-Time Bank Settlements: Revenue vs. Capital Nature and Tax Implications Explained A discussion forum addresses the taxability of income from a one-time settlement with a bank. One participant clarifies that tax implications depend on whether the transaction is revenue or capital in nature, referencing a specific case law for further details. Another participant points out a misunderstanding, noting that in a one-time settlement, the bank typically receives money, not the customer. They explain that interest recovered is taxable upon receipt if not previously taxed, while principal amounts are not taxable unless previously written off as a bad debt or loss.