Taxability of Compensation
QUERY
An individual had paid an advance of ` 600,000/- (i.e. application fee Rs. 50,000/-, allotment fee Rs.150,000/- and two instalments of Rs. 200,000/- each) for purchase of Land, to Housing Society in the year 1994, as per the terms & conditions for allotment of a Unit in Samiti Farm Lands Scheme mentioned in the allotment letter. However, the Society has failed to perform on its part and Land was not allotted till date.
The Society, intends to pay back the amount of Rs. 3,600,000/- (i.e. amount paid Rs. 600,000/- plus interest for the period from 1994 to 2018 Rs. 3,000,000/-) in the year 2018. What is the taxability of excess amount received i.e. Rs. 3,000,000/-?
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