I am Indian working in India and traveled to USA on a business trip. I slipped in the Ice and had a leg fracture in the the hotel. We have filed a case against the hotel through an US attorney and got the damages of $xxxx as compensation. Do i nee d to pay taxes for this money in India ?.While all my medical expenses were alreaday borne by travel insurance, I had allowances cut in my salary by employer and lost several other indirect emoluments.
Are the personal Injury settlements proceeds taxable?
11
Mar
Jim M
March 11, 2010 at 1:33 am
Yes.
And US taxes as well.
Prasanth
March 11, 2010 at 2:30 am
If the compensation is more than your expenditure, then the amount is taxable either in India or in the US. In your case, since the insurance covered all your expenses, the settlement amount is certainly taxable. If the tax on the amount has not already been deducted when funded to your account, you need to pay tax adding this to your income as “Income from Other sources”. If tax is paid in the US, you need not repeat the tax here.