sir our lands were acquired by the govt long back for mining.recently we were paid enhanced compensation including interest as per the hon'ble court orders.the govt while paying compensation deducted tds @10%for the interest component and paid the net amt.my question is whethet we need to submit the revised IT returns duly showing interest income for each year .the whole procedure will be cumbersome &we might not have filed some of the previous years also.the tax bracket may also change. kindly advise us thanks in adv srinivasa rao
With effect from AY 2010-11 Interest received on enhanced Compensation is taxable in the year of Receive and deduction equal to 50% of such interest income is allowed u/s 57.
This deduction is for exp. Incurred for getting enhance compensation and interest , this is ad-hoc deduction thus we can take direct benifit of 50% irrespective of actual exp. Incurred (means no effect of exp. Done or not or exp. higher or lower then 50 % )
Hope your query resolve now .
Dear Sir,
The enhanced compensation and interest thereon will be taxable in the year in which it was is received and not in the earlier years.
As per section 145 of Income Tax Act does say Income from other sources shall be computed in accordance with either cash or mercantile.
so, based on cash basis of accounting you can declare such income in which it is received.
Thanks and regards
CA. Sachin Sinha
9891315840
Dear Sir,
The enhanced compensation and interest thereon will become taxable in the year of receipt.
Further as per section 57 of the Act, you can claim ad hoc deduction of 50% on the interest amount.
Please feel free to call/revert in case you require any clarification on the above.
Thanks and Regards,
Abhishek Dugar
CA, CS, B.Com
Sorry I think your question is already answered
Dear Sir,
In your case the enhanced compensation is taxable in the year of receipt. So you need not worry about revising your previous returns.
Trust this clarifies your query.
Feel free to call back/ get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP.
