Interest received on Enhanced Compesation from Court, as per Ghanshyamdas HUF by Supreme Court Interest u/s Section 28 of Land Acquisition Act 1894 forms the part of Compensation Amount, but with effect from AY 2010-11 new section 57 is added under the head income from Other Source. Stating Interest on Compensation or Enhanced Compensation 50 % interest as income, now the issue is wheather Supreme court deceision will prevail or section 57(5) , because interest paid under section 28 is due to un due delay from the court to decide compensation, and further it is discretionery on th court wheather to pay Interest under section 28 or not, now i have argument interest paid under 28 is really a income or it forms the part of compensation. it is not same in case of Section 34 of L A Act , because this section invoks only after the undue delay from the Land Acquisition officer to remitt the compensation amount to the Court after the courts order, here the Compensation amount is fixed from that day the Principel debtor relation begins and interest paid u/s 34 is puerly interest, kindly confirm me whether the stand i am taking is correct.
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Interest on enhanced compensation on agriculture land
Replies (2)
Section 57 (2) (viii) is very clear about it as follows:
income by way of interest received on compensation or on enhanced compensation referred to in clause (b) of section 145A.
This will be considered as income under sction 57, whether it is due to delay in decision making or any other reason as section 145A says that interest on compensation will be included in income for the year in which it is received by assessee.
Let me know if you have any confusion
I have received interest on enhance compensation on compulsory acquisition of Agriculture land which is not Capital asset.
whether Interest is taxable?
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