In case of mortage loan when the house kept on mortage, its compulsorily accuired by govt. the compensation for the house may be less than or more than COA of the house. what will be tax consequences in the both the cases.
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Capital Gain
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Anand,
The provisons of the Capital gain is attracted, irrespective of the fact the property was mortaged or not.
The compensation received on complusary acquisition from the Authority is deemed to be the sale consideration. And the cost of acquisition etc., are same. If the compesation is more than COA, then it is capital gain (Long term or short term depends on the holding period, if held for morethan 36months it is LTCG,else short term) & Vice verca.
Thankyou,
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