Compulsory acquisition of land and builidng

Tax queries 544 views 1 replies

CLIENT RECEIVED RS 15 LAKH FROM STATE GOVT AS COMPULSORY ACQUISITION OF HIS LAND & BUILDING ON AUGUST 17.

IN MARCH 2018 THEY RECOVERED RS 1.5 LAKH FROM BANK ACCOUNT  AS TDS @ 10% AFTER GIVING A NOTICE THAT ACQUIRED LAND IS NOT ACQUIRED THROUGH  Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013  AND SAME IS ACQUIRED BY PREVIOUS LAW

MY QUERY IS WHETHER COMPENSATION IS TAXABLE UNDER CAPITAL GAIN?

Replies (1)
yes it is taxable because as per sec 45(5) if asset is compulsarly acquired by central govt then compansation received from court shall be deemed to be the full value of consideration
capital gain will be chargeable to income tax in the year in which compansation is received (here 17-18).
year of transfer for cost of acquisition will be year of compulsary acquisition.


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