Capital or Revenue Receipt – Amounts Received by Amount Legal Heirs From Social Security schemes
CBDT vide Circulor No. 573, Dated: 21-8-1990 has clarified that any such lump sum payment will not be taxable as income under the aforesaid Act CBDT vide Circular No. 776, Dated: 8-6-1999
Taking into account the principle laid down by the decided cases and CBDT circular it can be inferred that the amount received by legal heirs from social security scheme can be treated as capital receipt and hence not liable to tax.
Source: The Tax Publisher, The Tax Referencer 16-1-2012
