Section 4

Charge of income-tax

Awards to sportsman - Awards in the case of a sportsman, who is not a professional, will not be liable to tax in his hands as it would not be in the nature of income—Circular : No. 447, dated 22-1-1986.

Subsidy - Amount of subsidy received under 10 per cent Central Outright Grant of Subsidy Scheme, 1971, can be regarded as being in the nature of capital receipt in the hands of the recipient—Circular : No. 142, dated 1-8-1974.

Hindu undivided family, throwing of share in firm into family hotchpot - It would be incorrect to assume that the share of an assessee in a firm consists only of income-yielding assets. It equally comprises of risk and liability of paying debts on behalf of the firm. Therefore, the assessee cannot, under the Hindu law, make a declaration impressing a portion of his share in a firm with the character of joint family property whereby the joint family would have to bear the risk and liability of the business—Instruction : No. 747 [F. No. 288/29/74-IT(A-II)], (relevant extracts), dated 30-8-1974 [Source : 141st Report (1974-75) of the Public Accounts Committee, p. 77].

Gratuitous payments to widow/legal heirs of employee - A lump sum payment made gratuitously or by way of compensation or otherwise to the widow or other legal heirs of an employee, who dies while still in active service, is not taxable as income under the Income-tax Act, 1961—Circular : No. 573, dated 21-8-1990.

Ex gratia payment received by a person or his heir from the Central Government/State Government/Local Authority/Public Sector Undertaking, consequent upon injury to the person/death of a family member, while on duty, is not liable to tax - Circular : No. 776, dated 8-6-1999.