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Compensation on power line over agricultural land

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(Querist)
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.
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
03 March 2019 The compensation is for loss of crop. So it's only agricultural income not taxable.
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
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.
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swasti

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swasti (Querist)
04 March 2019 Thanks a lot Seetharaman Sir & Chakrapani Sir.
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