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Tax on enhanced compensation on acquisition of land

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(Querist)
31 July 2012 dear sir
my client has received enhanced compensation on the acquisition of agriculture land situated within the municipal limits. TDS @ 10% has been deducted from the compensation amount. now i want to know that whether the compensation amount received is tax free or not and how we can claim refund of the TDS.

thanks
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Mohit Naithani

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Mohit Naithani (Expert)
31 July 2012 Enhanced compensation is taxable in the year of receipt.

Computation of capital gain arising from Enhance compensation

Enhance compensation -------
Less Litigation Exp Actual
Less Indexed Cost of Acquisition N.A.
Less Indexed cost of Improvement N.A.

LTCG/STCG Taxable


In short no Indexed Cost of Acquisition and ndexed cost of Improvement is allow to deduct from enhance compensation. However Litigation and necessary exp (Advocate Fee, Court Exp etc) are allow to deduct on actual basis.
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CA Lokesh Pokharna

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CA Lokesh Pokharna (Expert)
31 July 2012 in addition if you have received interest also then 50% deduction on it allowed in the year of receipt.
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