Capital gain on compensation on compulsory acquisition

As per section 45(5) of the Act, Initial compensation receieved by the assessee shall be taxable in the previous year in which it is first received.

In case of enhanced compensation other than compensation receieved by way of interim order of the court or tribunal, shall be taxable in the previous year in which it is received by the assessee.

In case of compensation received by way of interim order of the court, it shall be taxable in the previous year in which final order is made by the authorities.

The cost of aquisition shall be taken as NIL.