Tax alert: Compensation for non-renewal of contract is capital receipt, not taxable has been saved
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Tax alert: Compensation for non-renewal of contract is capital receipt, not taxable
24 September 2024
The Delhi Bench of the Income-tax Appellate Tribunal (ITAT), based on facts, has rendered its decision that the taxpayer being a freelancer, the compensation received from the taxpayer’s contracting company for non-renewal of contract would be a capital receipt, neither taxable as ‘Income from business or profession’ under section 28(ii)(e) of the Income-tax Act, 1961 (ITA) nor as ‘Income from other sources’ under section 56(2)(xi) of the ITA.
