Sahil was using an urban land for agricultural purposes when the land was compulsorily acquired by the Govt, in the year 2002-03. He received a compensation of ₹ 8,00,000 which he contested in the court. The court gave decision in favour of Sahil and Government gave him an enhanced compensation of ₹ 6,00,000 on 17.11.2019. The assessing officer is of the opinion that, exemption u/s 10(37) is not available as the land was compulsorily acquired before 1.4.2004 and therefore, Sahil should pay tax on LTCG. Choose the right answer
A. Tax is payable @ 20% on ₹ 6,00,000 & 8,00,000.
B. Full compensation is exempt u/s 10(37)
C. Compensation of ₹ 8,00,000 was taxable but ₹ 6,00,000 will be exempt u/s 10(37)
D. Exemption is not available on Enhanced compensation as the land was initially acquired before 1.4.2004, the date when the exemption came in force.
Answer:C
Sahil was using an urban land for agricultural purposes when the land was compulsorily acquired by the Govt, in the year 2002-03. He received a compensation of ₹ 8,00,000 which he contested in the court. The court gave decision in favour of Sahil and Government gave him an enhanced compensation of ₹ 6,00,000 on 17.11.2019. The assessing officer is of the opinion that, exemption u/s 10(37) is not available as the land was compulsorily acquired before 1.4.2004 and therefore, Sahil should pay tax on LTCG. Choose the right answer
A. Tax is payable @ 20% on ₹ 6,00,000 & 8,00,000. B. Full compensation is exempt u/s 10(37) C. Compensation of ₹ 8,00,000 was taxable but ₹ 6,00,000 will be exempt u/s 10(37) D. Exemption is not available on Enhanced compensation as the land was initially acquired before 1.4.2004, the date when the exemption came in force.