Interest as part of compensation on property acquired

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This query is : Resolved

Rahul (Querist)

09 February 2014 Whether interest part of total compensation received from govt on acquisition of agriculture land is taxable or not????

No TDS was deducted by govt on interest component.

If taxable, kindly mention the section & rules of Income tax Act in detail...

OR whether interest component can be treated as part of total consideration received????

Nikhil Kaushik

Nikhil Kaushik (Expert)

09 February 2014 it is taxable as other income. please refer section 56(2)(viii) subject to deduction under 57(iv).

CA Y.Kondal Reddy

CA Y.Kondal Reddy (Expert)

09 February 2014 50% of such sum is allowed as deduction

Rahul

Rahul (Querist)

10 February 2014 Interest received as part of compensation on property acquired in the month of Apr, 2012 of preceding 21 months.

Whether can we file today, Income Tax returns for the FY 2010-11 and 2011-12 to claim the above mentioned interest income on accrual basis for the concerned financial years???

OR whether can we take any relief on accrual basis in the Income Tax Return for FY 2012-13 ????

Nikhil Kaushik

Nikhil Kaushik (Expert)

10 February 2014 may be not. as per 145A the interest received is deemed to be income in the year in which it is received.