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Compulsory acquistion

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This query is : Resolved

Mohit grover (Querist)

16 June 2015 if consideration received in advanve and property compulsory acquired in next assessment year, when will be Capital arise nd its year of taxability and plz tell the year of indexation of cost.

CA. Sunil Gokhale

CA. Sunil Gokhale (Expert)

16 June 2015 Capital gain arises only when the property is transferred and not when advance is received. So gain arises in the year of compulsory acquisition. Compulsory acquisition is done only by the Govt. which never pays in advance so such a situation never arises. In fact, that is the reason the capital gain on compulsory acquisition is taxable only in the year in which the compensation is first received. As the gain arises in the year of acquisition, the year of indexation will be the year of acquisition; only the taxation is postponed.

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