sir/mam,
i had purchased 1 urban land in year 2005 for Rs 10 lacs and the land has been compulsory acquired by the government of haryana in year 2012.
and after filing case in court i have received 50 lakh as a value of land and 50 lakh as interest on that value for late payment. in agreegate i have received 1 crore.
how much capital gain tax i have to pay and is there any way to reduce this tax.?
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capital gain on compulsory acquisition
Replies (6)
First as this is a long term property the gain will be LTCG.
Find out the indexed cost of acquisition & minus it from the sale consideration of 50 Lakh.
You can also deduct cost of improvement & cost of sales, if any.
The interest which you have received on compensation will be taxed under head “Income from other sources" & a flat deduction @ 50% is available on such income.
Find out the indexed cost of acquisition & minus it from the sale consideration of 50 Lakh.
You can also deduct cost of improvement & cost of sales, if any.
The interest which you have received on compensation will be taxed under head “Income from other sources" & a flat deduction @ 50% is available on such income.
Dear Mr Dhruv, can u pls illustrate a bit on the last line. Thanks.
Deduction is available in respect of the income by way of interest received on compensation or enhanced compensation & 50% of such income(i.e. interest) is deductible u/s 57(iv).
In this case as Mr.Shubham received 50 Lakh as interest on compensation, he can claim 25 lakh(i.e 50% of 50 Lakh) as deduction u/s 57(iv).
However, no other deduction is permitted.
In this case as Mr.Shubham received 50 Lakh as interest on compensation, he can claim 25 lakh(i.e 50% of 50 Lakh) as deduction u/s 57(iv).
However, no other deduction is permitted.
Thanks for your detailed answer. Appreciate it.
Your welcome :)
that means i have to pay tax on interest income @ 30% on 25 lakhs..??
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