Ltcg question

948 views 3 replies

Bikash Ranjan Ojha

Student

109 Points Joined June 2010

The urban lands of Mr. A were required by the State Government 10 years back

and compensation of Rs. 10 lakhs was awarded by the Court in February, 2008 and

the same was received in May, 2008.

State the consequences under the Income-tax Act, 1961, showing clearly the year of

taxability. What will happen if Mr. A dies and Mr. L, his legal heir receives the

enhanced compensation?

Replies (3)

C.A / C.S. DHARMESH SOJITRA

C.A/C.S - PRACTICE

149 Points Joined April 2010

As per my opinion, the taxability arries when the Govt. Compensation received.

i.e. as above case compensation received in May'08 then, taxability arries in the A.Y.2009-10. The reason behind that, the amount of compansastion not certain, and so it is taxable in the year when it is actual received.

Bikash Ranjan Ojha

Student

109 Points Joined June 2010

Thanks Dharmesh.........

Can you pls tell the sec covering these type of incomes..

Mukesh Kumar

CA STUDENT

58 Points Joined January 2012

Mr. Dharmesh is right. And in case of death of Mr. A his legal represenative will be liable to pay tax and income will be taxable in the same head in which it was taxable in the hands of Mr.A.

One more point of attention is that its nature will also be same in the hands of legal representative ie. short term or long term whatsoever.

Please refer to section 45(5)