Regarding compensation on demolished building

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Haripriya Vemulapally (Querist)
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16 July 2019 Whether compensation received from government for demolition a part of a building under road extension purpose is taxable under Capital Gains???? TDS has been made under Sec 194J by the Government.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 July 2019 What the SC says: If an owner succumbs to the government only to avoid litigation, the transaction is not a sale but compulsory acquisition, and should be exempted from capital gains tax.

There have been cases where landowners did not have a choice but to handover their property to authorities for project developments. However, such a landowner is under no obligation to pay capital gains tax on the compensation he received from authorities, the SC has ruled.

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