Application was filed on behalf of applicants/claimants seeking release of 20 per cent TDS deducted by non-applicant/Insurance Company on account of interest earned on awarded amount. Allowing the application it was found that proportionate valuation of entitlement of interest amount to awarded amount was only Rs. 7000 per claimant, i.e. below threshold limit of Rs. 50,000 which could be taxable by application of section 194A(3)(ixa) of the Act. Registry was directed to release amount deposited by Insurance Company, on account of deduction of tax on interest amount in favour of applicants.
Oriental Insurance Company Ltd. v. Abdul Rehman Lone (2022) 28 4 Taxman 125 (J&K & Ladakh)(HC)
S. 194A : Deduction at source-Interest other than interest on securities-Entitlement of interest amount to awarded amount was only Rs. 7000 per claimant. i.e. below threshold limit of Rs. 50,000-Directed to release the amount without deduction of tax at source. [S. 194(3)(ixa)]