Regarding Interest on Enhanced Compensation
This query is : Resolved
Jaswinder singh
(Querist)
28 June 2025
Respected Colleagues,
A person had received Interest (194A) on enhanced compensation of Compulsory Acquisition of RURAL Agriculture Land in FY 2017-18 and filed ITR with only FD Interest Income without taxing 50% Interest on enhanced compensation in ITR with the intent that interest on Enh. Comp. was fully exempt being rural agriculture land not a capital asset, Now kindly advice whether 50% Taxed or fully exempt?
A person had received Interest (194A) on enhanced compensation of Compulsory Acquisition of RURAL Agriculture Land in FY 2017-18 and filed ITR with only FD Interest Income without taxing 50% Interest on enhanced compensation in ITR with the intent that interest on Enh. Comp. was fully exempt being rural agriculture land not a capital asset, Now kindly advice whether 50% Taxed or fully exempt?
Nikhil Kaushik
(Expert)
01 July 2025
should be tax exempt since this is agricultural land. refer Union of India Vs. Hari Singh dated 15th September 2017. Though, please do check if there is any case law superseding this one.
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