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2 Comments

  1. Lal Singh says:

    Sir
    I got compensation rs 1.25 crore from UP govt. On acquiring my agricultural land in Aug 2019,I got that amount fixed deposit for 9 months.I got rs 8 lakh as interest and subsequently tds was deducted.
    Now my question is…
    Whether compensation received for agricultural land is tax free.? if no..
    How the tax would be calculated
    Kindly guide

    1. Srikant Agarwal says:

      Rural agriculture land is not a capital asset and hence any gain arising on sale of such land will not attract capital gain tax / any other head income tax unless the same was held as stock in trade.
      In case of urban agriculture land the same is fully taxable subject to exemption u/s 54B and sec 10(37).
      Sec 10(37) allows full exemption in case of compulsory acquisition of urban agriculture land by govt subject to fulfillment of certain criteria.
      Since your case appears to be of compulsory acquisition so if it was rural agriculture land then fully exempt and in case it was urban agriculture land then sec 10(37) can be applied subject to certain condition in sec 10(37)

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