Pushkar (b) (41 Points)
11 May 2012Hi
A part of my land which is plantation land has been compulsorily aquired in order to widen a national highway. Is the compensation that I have received liable for capital gains tax.
If not, will it be counted as income and taxed according to the relevant slab. Please advise. I am a bit confused.
Tejas Jain
(Chartered Accountant)
(314 Points)
Replied 11 May 2012
if the asset satisfies followinf condition thn this is not a capital asset and the gain arised out of this asset is not chrgeable to tax:
"In the case of an individual or HUF, capital gains arising from the transfer of agricultural land, where such land is situated in any area falling within the jurisdiction of a municipality or a cantonment board having population of at least 10,000 or in any area within such distance, not being more than 8 kms, from the local limits of any municipality or cantonment board. Such land should have been used for agricultural purposes during the period of two years immediately preceding the date of transfer. Further, such transfer should be by way of compulsory acquisition under any law and the said capital gains should have arisen from the compensation received on or after 1st April, 2004."
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