X, who has wholly managed the affairs of XYZ Ltd., an Indian company, since 2005, receives ₹ 200 lakh…
The compensation is taxable as business income under section 26(2)(b) of the Income-tax Act, 2025. This provision covers termination payments to a person wholly or…
Choose your answer
X, who has wholly managed the affairs of XYZ Ltd., an Indian company, since 2005, receives ₹ 200 lakh from the company on termination of his management on 1 August 2026. Under the Income-tax Act, 2025, such compensation is taxable as
Answer and explanation
Correct answer D
The compensation is taxable as business income under section 26(2)(b) of the Income-tax Act, 2025. This provision covers termination payments to a person wholly or substantially managing an Indian company's affairs.
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Jammu & Kashmir and Ladakh SET (JKSET/LASET)