Tds

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CS Abhijeet soni Advocate (Querist)
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03 March 2012
Sir I got compensation from govt , Rs.17484900/- after TDS we are the five member for this now time we also invest , money Rs 7895000/- for purchase a house. Now tell me plz remaining amount 17484900-789500 = 9589900/ is taxable or not .

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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03 March 2012 First of all -Congratulations to all the five members including yourself.
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Why the Govt. has given the compensation to all of you (and not all of us)? Please clarify ?
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CS Abhijeet soni Advocate

CS Abhijeet soni Advocate (Querist)
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04 March 2012 sir we have agriculture land , that acquired by the govt. and govt paid us some money we filed case that this is not sufficient for this land so we won the case and govt give us increased amount.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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04 March 2012 1. In case of Rural Agriculture Land -

No capital Gain arises as it is not treated as a capital asset. Entire TDS may result into Refund.
2. In case of Urban Agriculture Land:
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Vide Section 10(37) the capital gain arising on compulsory acquisition of urban agriculture land is also exempt from AY 2005-06.
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I am of the view that , as the capital gain is exempt, question of taxability remains to the extent of interest received by you , if any.
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You are not required by law to purchase a house for capital gains exemption. If you wish, you may do so.
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Also , take advise of your local tax consultant, in this matter.
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C.P.CHUGH

C.P.CHUGH (Expert)
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04 March 2012 Dear Mr Paras,
Deduction of Tax u/s 194L has been discontiuned since 2000 and what i understand from the querry is that tax has been deducted from interest payment on account of late payment of award money. This interest is nevertheless taxable in the hands of receipients. Such person is liable for discharging his tax liability subject to credit of tax already deducted at source. Whey whole of the compensation award together with interest has been paid to querriest and not to all stake holders in proportion to their stake is to be seen, because this may result in total tax liability fastnered upon such person. More over it has also not been clarified whether the agricultural land is or not in any notified area or within prescribed limit of municipal limits of a notified area without which any answer to the querry would be vague and meaningless.

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