alchemist coffee project - ECD Germany
Interest or compensation received from the builder as ordered by RERA is generally treated as Income from Other Sources under the Income Tax Act. It is taxable in the year of.
Interest or compensation received from the builder as ordered by RERA is generally treated as Income from Other Sources under the Income Tax Act. It is taxable in the year of.
The ruling provides clarity on how such compensation should be treated under the Income Tax Act, offering relief to builders who provide compensation or damages to allottees for.
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the compensation for delay in property handover by builder is not taxable under Income Tax Act.
Understanding the Context
As per Supreme Court (Dr. Shamlal Narula) and later rulings, interest awarded as compensation is taxable only on receipt basis, not accrual. So, if the interest was awarded over.
The compensation received as rent from a builder due in a redevelopment project cannot be taxable income for the former flat owner, the Mumbai bench of the income-tax appellate tribunal (ITAT) has.
The Appellant submitted that he had a flat in Satsang Bharti CHS Ltd., Malad (E), Mumbai and which building was undergoing redevelopment. The amounts received by the Appellant were basically a.
The Tribunal held that amounts received as compensation for temporary relocation and inconvenience during redevelopment were capital receipts and hence not taxable.
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Key Insights
ITAT Mumbai held that compensation paid by the builder for facing hardship during redevelopment of flats is in nature of capital receipts and accordingly not liable to tax.
Assessee received a certain amount as compensation for the cancellation of BBA on account of the non-delivery of villa. She showed the same as capital receipt and offered it to tax as.
Alternative Tax Considerations: There's no straightforward alternate treatment for the compensation received. The primary focus is on the interest component, which is taxable as income.
