Section 56(2)(vii) is among many exceptions provides under clause (d) that if an individual or HUF receives any sum of money without consideration (read as gift ) in contemplation of death , the receipt will not be taxable. The issue is what is the meaning of phrase "in contemplation of death " which is not explained any where in the Income Tax Act.
Is Leave Salary or NSS Taxable in Hand of Legal Heir of Employee?
March 16, 2010 by
Leave salary is part of salary as per section 17(1) of the I T Act. As such it is taxable in hand of employee during the employment period. However, if the cash equivalent of leave salary is paid to legal heir on his /her death, the amount is not taxable in hand



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