CAPITAL GAINS

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 June 2010 My client has purchased a flat from a builder for Rs. 10,00,000 during the year 2003. The said flat was constructed by the builder in the Cellar floor without approval. So corporation authorities have dismantled the said flat in the cellar floor during the year 2005. My client has filed a suit and got the amount of Rs. 10,00,000 during the year 2007. Later he has filed another suit for interest compensation. He has received interest amounting to Rs. 3,00,000 in December,2009. How to treat this amount in his Income tax returns for the Asst. Year 2010-11.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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04 June 2010 for the amount of Rs. 10,00,000
Capital gain shall be computed(note that the indexation benefit shall be available till financial year 2007-08)

interest compensation.
as per amended provision of section 145 entire interest shall be taxable in the year of receipt further 1/3rd of interest shall be allowed as standard deduction(irrespective of actual expenditure) from such interest.