Insurence claim for Replacement of Asset, Income Tax

[Dinesh Sagade]

What will be the tax treatment for the insurance claim received for the replacement of asset damaged along with the claim received to compensate the loss due to damage ?

Posts / Replies

[Pradeep Khatri]

If you had aviled the benefit of  CENVAT credit on such assets, then, in this scenario you would have to reverse it proportionately by deducting the depreciation @ 2.5% per quarter.

[Usha Mani]

Under VAT Act and Rules, the VAT input credit availed should be reversed on prorata basis.  Normally, input tax credit is availed over a period of 3 years. The rates will be 50% during first year, balance 50% in the second and third year.  If the loss is during the third year 25% of the input credit can be reversed.  Incase it has already been adjusted, it should be paid back to the Governmnet.

Thanks and Regards

 

R USHA

[Dinesh Sagade]

Thanks for your opinions.... bur I was expecting the opinions fron Income Tax point of view...taxability of the insurance claim received for Replacament of asset & that received towards the loss of asset damage.