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enhancement received

Naveen kumar (accounts) (115 Points)

18 December 2018

dear sir my client has received enhanced compensation on the acquisition of agriculture land situated within the municipal limits. TDS @ 10% has been deducted from the compensation amount. now i want to know that whether the compensation with interest amount received is tax free or not and how we can claim refund of the TDS. thanks

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4 Replies

Prajwal Shetty (Artical Assistent) (237 Points)
Replied 19 December 2018

Sir if the assessee is an individual or HUF used the land for agriculture purposes for preceding 2 years then the capital gain is exempt under section 10(37) subject to conditions that the consideration is received from govt.

But interest for delay compensation is taxable under IFOS after 50% deduction.

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Naveen kumar (accounts) (115 Points)
Replied 19 December 2018

Thanks sir
But charted tell me a decision released by Supreme Court that now interest is exempt

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Prajwal Shetty (Artical Assistent) (237 Points)
Replied 19 December 2018

If the judgement is applicable in our case then you can claim the exemption benefit.

Please let me know the name of the case.

Naveen kumar (accounts) (115 Points)
Replied 19 December 2018

Case Name : ITO Vs Shri Basavaraj M Kudarikannur (ITAT Bangalore)

Appeal Number : ITA Nos. 1747 & 1750/Bang/2017

Date of Judgement/Order : 01/06/2018