Question And Answer
Subject: Compulsory acquisition of non agricultural land
Querist: Zackariah
Answered by:
Tags: , ,
Date: January 8, 2022
Query asked by Zackariah

Dear Sir,

A portion of my land which is non agricultural was acquired by the Govt.of Kerela for construction of a bridge in 2017. During this time they had verbally mentioned that this was tax free.  They gave me the compensation for the land acquired, but now I am being told that I have pay capital gain tax for this. Can i just ignore this and avoid paying tax for this compulsory acquisition of non agricultural land?

This is really unfair that the govt. takes land forcefully from people and then we are forced to pay tax on compensation given by the govt. due to the loss incurred for us.

Please advise on this.

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Answer given by

One has to read the land Acquisition Act of Kerala Govt . If the said Act contains a specific section exempting the capital gain on acquisition of land then the assessee need not pay the capital gains tax. It may be desirable to consult the tax consultant , who can guide properly after studying all relevant documents .

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