Compensation on power line over agricultural land
This query is : Resolved
02 March 2019
My friend is having a agricultural land in Madhya Pradesh, on which there is High tension Line proposed. Government i.e. M.P.Power Transmission company Limited is giving compensation for the high tension power lines over the agri land. Is the compensation taxable or non-taxable under Income Tax Act 1961. Please suggest.
CA R SEETHARAMAN
(Expert)
03 March 2019
The compensation is for loss of crop. So it's only agricultural income not taxable.
03 March 2019
Drawing electricity line over land, reduces materially the market value of the land.
Compensation, therefore, can be considered as capital receipt. Since no transfer/
relinquishment of the asset,question of capital gains also doesn't arise.
Compensation, therefore, can be considered as capital receipt. Since no transfer/
relinquishment of the asset,question of capital gains also doesn't arise.
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