Win for Sushmita: Rs 95 Lakh Harassment Compensation Not Taxable

There’s good news for Sushmita Sen on her birthday. The city bench of the income-tax appellate tribunal (ITAT), which handles income-tax disputes, has ruled in favour of the actor over a settlement compensation case. The compensation against a sexual harassment complaint made by her has been held as non-taxable.

Much before the #MeToo movement gained momentum in India, Sen recieved a compensation of Rs 95 lakh from Coca-Cola India in 2003-2004 after she complained against sexual harassment by one of their employees.

According to Times of India, the ITAT held that the compensation Sen got did not fall under the “income” category but was rather a “capital receipt”. Hence, it is not taxable. The body also set aside the penalty of Rs 35 lakh imposed on her for concealment of income - she had not shown Rs 95 lakh as part of her income to I-T.

Sushmita Sen had signed a Rs 1.5-crore endorsement deal with Coca-Cola India, but the company had prematurely terminated her contract. The actor protested that it was a reaction to her rightfully protesting against the sexual harassment by one of the employees of the company. A settlement between the two parties was subsequently reached.

Sen received Rs 1.45 crore as part of the settlement from Coca-Cola India. She offered Rs 50 lakh for income tax, which is the sum she was entitled to get in case of premature termination of the contract. She maintained that the remaining Rs 95 lakh was a compensation and hence, not taxable.

(Source: Times of India)

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