As per section 96 of the rfctlarr act income tax shall not be levied on any award or agreement made except those made under section 46 so compensation received for compulsory acquisition of land except those made under section 46 of rfctlarr act is exempted from the levy of income tax. 362016 has cleared a cloud of doubt clarifying the issue if compensation received for compulsory acquisition of land is exempt under income tax act as well as right to fair compensation and transparency in land acquisition rehabilitation and resettlement act 2013 rfctlaar act.
Taxability Of Interest On Enhanced Compensation Arising On
Compulsory acquisition is the power of government to acquire private rights in land without the willing consent of its owner or occupant in order to benefit society.
Compensation For Compulsory Acquisition Mobi. As a direct result of government action people lose their homes their land and at times their means of livelihood. Compensation for compulsory acquisition of land if you lend a car to a friend for a specified period of time but you suddenly need the car after your friend had filled its fuel tank. Interest on compensation from compulsory acquisition.
This guide on compulsory purchase and compensation is written for people who work in land administration and all those with an interest in land land tenure and their governance. The right to compensation for the compulsory acquisition of real property is constitutional and most enabling laws prescribe valuation methods to be adopted in determining the compensation payable. You may pay your friend for his unexhausted petrol.
The ministry of finance vide circular no. The public authority which acquires the land is obliged to pay just compensation to the person whose land has been acquired. The right to fair compensation and transparency in land acquisition act exempts all the acquisitions except for the acquisition as provided us 46 of the act from the imposition of income tax.
Compulsory acquisition of land and inequitable compensation for its loss can reduce land tenure security increase tensions between the government and citizens and reduce public confidence in the rule of law. Compulsory acquisition of agricultural land exempt from income tax. Compensation whether in monetary terms or the replacement of land is an essential requirement of compulsory acquisition.
In this case the capital gain should be recomputed for the assessment year to which such compensation originally relates. Reduced compensation subsequent to the sanction of compensation both initial and enhanced compensation can be reduced by any court tribunal or other authority. The nsw government has power under various statutes to acquire land compulsorily.
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