Capital gain

This query is : Resolved

madhav hegde (Querist)
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09 May 2017 X rec'd a sum of Rs. 340000 as int on enhanced compensation for compulsory acquisition of land by SGovt in May 2015 ,Of this only Rs. 12000 pertains to the current year and pertains to earlier years. The amt chargeable to tax for the AY 2016-17 would be ???

Amol S Joglekar

Amol S Joglekar (Expert)
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09 May 2017 The choice is with the assessee.....EITHER the entire amount of interest can be offerred to taxation in the year of receipt of the interest OR bifurcate as per the years and offer the same in the respective years

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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09 May 2017 Interest on compensation for compulsory acquisition is taxable in year of receipt under head "Other Sources". Alao 50% of it is exempted.

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CA Mohit Bansal

CA Mohit Bansal (Expert)
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11 May 2017 Rural agricultural land is specifically excluded from the definition of Capital Asset in the Income Tax Act 1961. Earlier Capital Gain from sale or compulsory acquisition of Urban agricultural land was to be treated as per section 10(37) of the Income Tax Act, 1961. However after 2014 the RFCTLAAR Act,2013 which is wider in scope than Income Tax Act, 1961 has exempted the capital gain from compulsory acquisition of land whether it is urban land or rural land. Thanks!