The society is in form of apartments and the appartment owners have vacated the premises for redevelopment being carried out by a developer. The developer has agreed to compensate apartment owners for X amount to spend for rent which apartment owners may have to pay as rent. The apartment owner lands up paying lesser than amount of compensation recieved by him. There is net cash generation by this effect. Does this cash be considered as an income ? What tax liability one has on compensation received? Will the tax be on full amount of compensation or on difference of compensation and actual rent paid?
Any insights?
Thanks in advance.
CAclubindia
