Question ID : 21511

Compulsory Acquisition for Highway project - Whether exempted from income Tax

Dear All, An assessee's vacant residential land was acquired by TN Govt for highways project. No Stamp duty and Registration fees was paid since both are exempted by G.O 56 CT&RD dt 29.06.17. Being a compulsory acquisition can the assessee claim exempt from Income Tax by virtue of CBDT Circular No. 36/2016 dated 25/10/2016.

CBDT vide Circular No: 36 of 2016, Dated 25/10/2016 offers due recognition to the provisions of section 96 enacted under the "RFCTLARR Act, 2013" so as to treat award under the said Act as tax-free under the Income -tax Act, 1961
No TDS done (value is Rs 31 lakhs) and the document says acquired by Tamilnadu government for public purpose and executed by the highways department. Compensation not given at Market value.

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