capital gain
This query is : Resolved
20 January 2009
whether interest received on enhanced compensation is capital gain or income from other sources ?
CA Pawan Goswami
(Expert)
20 January 2009
It is taxable under the head Income from Other Sources.
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K V Subba Rao
(Expert)
20 January 2009
Unless purpose for which compensation is received is known, it may be difficult to form and express an opinion
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21 January 2009
It is Income from Other Sources only.
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21 January 2009
The example is goes like this.. we have received rs.8,50,000 from the gov during nov 2008(enhanced figure 2,00,000 and interest amounts to rs.6,50,000)against compensation received (not on agricultural land)on AY2003-04..
After no returns have been filed. We want to file 2006-07,2007-08 & 2008-09(FY).
The interest portion comprises of earlier years..say from 1998 to 2008 nov..
shall we take the proportionate interest income for 2008-09 only and balance transferred to those two earlier years....
After no returns have been filed. We want to file 2006-07,2007-08 & 2008-09(FY).
The interest portion comprises of earlier years..say from 1998 to 2008 nov..
shall we take the proportionate interest income for 2008-09 only and balance transferred to those two earlier years....
K V Subba Rao
(Expert)
25 January 2009
It is taxable. The following extract will perhaps of be good help to you for approportiong interest income to relevant years.
"Interest on land compensation
Interest must be spread over on annual basis, from date of delivery of possession to date of court order - Where compensation awarded under the Land Acquisition Act is enhanced by the order of the Court on a reference under section 18 of Land Acquisition Act or on further appeals, interest on enhanced compensation cannot be taxed all in lump sum as having accrued on the date on which the Court passes the order for enhanced sum as having accrued on the date on which the Court passes the order for enhanced compensation; the interest has to be spread over on an annual basis right from the date of delivery of possession till the date of the order of the Court on a time basis - K.S. Krishna Rao v. CIT [1990] 181 ITR 408 (SC)/Peter John v. CIT [1986] 157 ITR 711 (Ker.)(FB)"-Source:https://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/casesec5.htm
"Interest on land compensation
Interest must be spread over on annual basis, from date of delivery of possession to date of court order - Where compensation awarded under the Land Acquisition Act is enhanced by the order of the Court on a reference under section 18 of Land Acquisition Act or on further appeals, interest on enhanced compensation cannot be taxed all in lump sum as having accrued on the date on which the Court passes the order for enhanced sum as having accrued on the date on which the Court passes the order for enhanced compensation; the interest has to be spread over on an annual basis right from the date of delivery of possession till the date of the order of the Court on a time basis - K.S. Krishna Rao v. CIT [1990] 181 ITR 408 (SC)/Peter John v. CIT [1986] 157 ITR 711 (Ker.)(FB)"-Source:https://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2008ITAct/casesec5.htm
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