Supreme Court to Decide Income Tax Exemption on Merchant Navy Officer's Salary Credited in Indian Bank Account
“ In the event, he is exempted from payment of tax, the Tribunal ought not to have applied any deduction on account of income tax.”, the court viewed
Income Tax Exemption
Income Tax Exemption
The Supreme Court decided to hear the special leave petition to decide whether the income credited in an Indian bank account while working with a Foreign Entity would be exempted from the payment of Income Tax under the Income Tax Act, 1961.
Vandana & Ors, filed the petition which was arose out of impugned final judgment and order dated 28-09-2018 in FAO No. 3065/2013 passed by the High Court of Punjab & Haryana at Chandigarh.
The Punjab & Haryana High Court upheld the Motor Accident Claims Tribunal (“MACT”) decision to deduct 30% towards tax liability while computing the compensation claim of the Appellant's deceased husband, who was employed with British Marine PLC, London as Merchant Navy Officer earning 3,200 USD monthly income.
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The MACT awarded Rs. 36,04,000/- as final compensation to the Appellant, which included the 30% deduction as the tax liability payable towards the income earned by the deceased. The High Court upheld the MACT's decision, but enhanced compensation to ₹1.01 crores by adding 40% future prospects.
Challenging the deduction, the Appellant, wife of the deceased, approached the Supreme Court. The two bench of Justices Pankaj Mithal and Prasanna B. Varale granted leave in the matter along with framing a question of Whether Merchant Navy officers' foreign-earned income is taxable in India, and if not, whether the Tribunal and High Court erred in deducting 30% income tax while calculating compensation.
“In the event, he is exempted from payment of tax, the Tribunal ought not to have applied any deduction on account of income tax.”, the court viewed.
Mr. Aditya Hooda, Adv. Dr. Surender Singh Hooda, AOR Mr. Gagan Gupta, Sr. Adv. Mr. Rajeev Maheshwaranand Roy, AOR Mr. Nilesh Kumar, Adv. Mr. P Srinivasan, Adv appeared for the petitioner. Mr. Gagan Gupta, Sr. Adv. Mr. Rajeev Maheshwaranand Roy, AOR Mr. Nilesh Kumar, Adv. Mr. P Srinivasan, Adv appeared for the respondent.
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