Tax on compulsory acquisition

This query is : Resolved

swasti (Querist)
Follow

29 May 2013 A company has received compensation on compulsory acquisition of a part of its land. What is the tax treatment of such compensation?

Ganeshbabu K

Ganeshbabu K (Expert)
Follow

29 May 2013 Compute capital gain tax on such part of land
for which compensation received.

Message likes : 1 times

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

29 May 2013 Yes. calculate the capital gain under section 45 and refer section 54D for exemption criteria

Message likes : 1 times

Upgrade to CAclubindia Pro. Subscribe Now!

swasti

swasti (Querist)
Follow

30 May 2013 Thanks a lot Sir. One more thing on which I would like to seek your guidance. The DD/PO for compensation has been made in the name of individual who was authorised by the directors of the company by way of Power of Attorney. Now the individual is depositing the DD in his account and thereafter giving the cheque from his account to the company. Would there be any problem for the individual in future in his tax assessment?

Ganeshbabu K

Ganeshbabu K (Expert)
Follow

30 May 2013 If amount was greater than 10 lakhs same will be reflected in AIR information in 26AS of Individual.

So incometax departement may ask for clarification on this transaction so same can be explained to departemnet by individual that there is no revenue loss in this transaction.

Message likes : 1 times

swasti

swasti (Querist)
Follow

05 June 2013 Thanks a lot Sir