Whether compensation taxable
vivek chatter
(Querist) 17 September 2013
This query is : Resolved
I have received compensation for delayed completion of my flat to be used for residential purposes. Whether the compensation received is capital receipt and thus exempt or it is taxable?
The Flat is received after 6 months of due date. Total amount has been paid say 100 Lacs before the due date of completion. For delay caused compnsation of 5 lacs is received at the time of possession of flat.
ajay sethi
(Expert) 17 September 2013
your chartered accountant is your best guide in this regard
Advocate Ramesh
(Expert) 17 September 2013
Have you received compensation alongwith flat or only compensation. If compensation is alone, then taxable.
R.K Nanda
(Expert) 17 September 2013
contact tax lawyer.
Ms.Nirmala P.Rao
(Expert) 17 September 2013
Dear Client,
If it is only for self occupation and if it's your your sole residential property, such compensation received by you is to be reinvested by you in the purchase of another residential property and if you've no other residential property of your own for self occupation it's not taxable to income tax. Buy it in the name of one of your family members including extended family members to get exemption from tax liability if already you've one residential property occupied by you. That's proper tax planning. Only one residential property for self occupation is exempt from income tax under IT Act 1961; otherwise it's taxable.
Ms.Nirmala P.Rao
Legal Expert
