Taxability of land compensation under compulsory acquisiton
This query is : Resolved
Saurav Sharma
(Querist)
01 August 2017
An individual has received compensation (having 3 components) thru NHAI for compulsory acquisition of land under Land Acquisition Act, 2013. The land is non-agriculture and located in urban area. The compensation received has 3 components-
1. Cost of Land at current Market Value
2. Compensation for Rehabilitation
3. Interest on above combined amount
Compensation received is tax free and interest has to be taxed under "Income from Other Sources" with 50% deduction available under Sec 57(iv). My query is whether the cost of land received shall be treated as part of the award/compensation and be tax free or whether it will be taxed under Capital Gains.
1. Cost of Land at current Market Value
2. Compensation for Rehabilitation
3. Interest on above combined amount
Compensation received is tax free and interest has to be taxed under "Income from Other Sources" with 50% deduction available under Sec 57(iv). My query is whether the cost of land received shall be treated as part of the award/compensation and be tax free or whether it will be taxed under Capital Gains.
Amol S Joglekar
(Expert)
01 August 2017
it will be taxed under capital gains subject to exemption as set out in section 54D
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