Capital Gain on Compulsory Acquisation by Govt.

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Guest (Querist)

20 August 2008 If the initial compensation is less than the cost of acquisation the in such a case will treatment will be given,

Weather capital loss will be treated or remaining part of caost of acquisation will be set off with additional compensation.

E.g.

A property is compulsory acquired by govt. by paying initial compensation of rs. 250000 on 1.1.2008. Cost of Acquisation being rs. 500000. Later on on 1.5.2010 govt. accepts additional compensation of Rs. 300000. Will be the tax treatment in A.Y. 2008-2009 & 2011-2012

Thank You

Kunal Agrawal
kunalagrawal@aol.in
+91-99295-03735

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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02 April 2012 In AY 08-09 the total cost of acquisition/indexed cost of acquisition shall be reduced from the total sale consideration.

The balance shall be capital loss and shall be carried forward.

In AY 11-12

The additional compensation of Rs. 3 lakhs shall be taxable as capital gain. From this capital gain, the brought forward loss shall be set off and the balance shall be taxable as capital gain.

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