Interest On Enhanced Compensation u/s 28 of Land acquisition act .

Interest received under Section 28 of the Land Acquisition Act is part of compensation and takes the same tax character as the land acquired. Therefore, where the land is rural agricultural land, such interest is not taxable at all, as conclusively settled by the Supreme Court in Ghanshyam (HUF). In contrast, interest under Section 34 is always taxable as “Income from Other Sources”, with a 50% standard deduction u/s 57.