Dear friends
In our case there is compulsory acquisitin of land on 22.07.10 but an advance amount is received on 22.03.10 TDS also deducted on that. Whether the Advance amount is taxable in AY 2010-11 on receipt basis or during AY 2011- 12 on the basis of sale. an urgent reply is expected
yes advance recd will taxable on receipt basis and at the time of sale minus advance payment recd will be STCG/STCL.
Q: In our case there is compulsory acquisitin of land on 22.07.10 but an advance amount is received on 22.03.10 TDS also deducted on that.
Ans : Advance amount is taxable in AY 2010-11 on receipt basis. You have to calculate capital gains as if the initial compensation received is full value of consideration. From this , if the asset is LTCA, deduct indexed cost of acquisition of such asset for arriving the capital gains.
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When you will receive the balance amount it will be treated as LTCG as Cost of Acquisition which will be taken then is... NIL.
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In case of Comp. Acquisition , taxability is on the receipt basis.
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