Tax on hardship compensation as rent every month in redevelopment

Is hardship rent per month recived in RE-DEVELOPMENT by developer of society taxable??

Will senerio change as taxable if amt of rent recived not spent on housing rent??

Replies (3)
Quick Summary
This discussion explores whether hardship rent paid by a developer to society members during redevelopment is subject to income tax. Generally, such payments are considered taxable income. The thread also questions if the tax status changes if the rent isn't spent on housing, with the consensus leaning towards the taxability remaining unchanged as it's typically viewed as a revenue receipt. It also references a Bombay High Court decision suggesting it could be a capital receipt, prompting a request for further clarification with case law.

Hardship rent received by members of a society from a developer during re-development is generally considered taxable as income under the Income Tax Act.

Regarding the second part of your question, if the amount of rent reeived is not spent on housing rent, the taxability might not change solely based on the usage. The tax treatment typically depends on the nature of the receipt (whether it is a capital receipt or revenue receipt) and the tax laws applicable. Hardship rent is usually seen as a revenue receipt and thus taxable. 

Then what about Bombay High Court decision in Ajay Parasmal Kothari stating it is capital receipt not taxable

Kindly elaborate your ans with case law

 

https://youtube.com/watch?v=1uXYBDxiMgw&si=Nczc4CUxsLA1Tokf

https://youtube.com/watch?v=7GrYkvjeE3M&si=Dp8oLQCPVC3GR5PX

 

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