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Accident compensation cannot be subjected to TDS

The Madras High Court has said compensation awarded by the Motor Accident Claims Tribunal or the interest accruing therein cannot be subjected to tax deducted at source (TDS).

A civil revision plea was filed by the Managing Director, Tamil Nadu State Transport Corporation (Salem) Limited, Dharmapuri, against an order passed by Additional District Judge, Fast Track Court, directing the corporation to deposit the amount deducted as TDS to the MACT claimant.

The Hon'ble court said that compensation awarded by the Motor Accident Claims Tribunal, and interest accruing thereon, is to ameliorate the sufferings of the victims and does not have the character of "income". If there is a conflict between a social welfare legislation and a taxation legislation, the social welfare legislation will prevail since it subserves larger public interest.

Article referred: http://www.financialexpress.com/article/personal-finance/accident-compensation-cannot-be-subjected-to-tds-madras-high-court/273862/
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