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Compensation recieved on urban agricultural land acquired
Compensation is received on urban agricultural land acquired in two parts:-
1) Sale consideration :- 500000
2) Rehabilitation charges :- 500000
Total 10 lakhs received
What will be the total sale consideration for computing capital gains, 5 lac or 10 lac
Will rehabilitation charges form part of sale consideration or it would be considered as normal income ?
Replies (4)
Sale consideration is received from govt or non- govt entity ?
from govt and no tds deducted
kindly reply if someone knows
Hi,
If this is a case of compulsory acquisition of land, then terms & conditions of such rehabilitation charges received is to be checked for considering it as a sale consideration i.e the enhanced consideration. Refer Sec 45(5) & the following link
https://www.bcasonline.org/onlinebackup/articles/artin.asp?243
Accordingly, sale consideration will be Rs 10 lacs, if the conditions are satisfied else it will be Rs 5 lacs.
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