| Question And Answer | |
|---|---|
| Subject: | hardship compensation under redevelopment Agreement |
| Category: | Income-Tax |
| Querist: | Sadanand Marathe |
| Answered by: | Law Intern |
| Tags: | hardship compensation, redevelopment, Sarfaraz S. Furniturewalla v. Afshan Sharfali Ashok Kumar |
| Date: | May 29, 2025 |
I am the owner of the flat in Mumbai (along with the property card now transferred in my name- transferred by inheritance.) Our building is now going for redevelopment and under the Development Agreement, we will be getting certain hardship compensation – the question is weather this hardship compensation will be taxable and will be subjected to TDS provisions.
According to the judgement of the Bombay High Court in Sarfaraz S. Furniturewalla v. Afshan Sharfali Ashok Kumar, the hardship compensation is not to be considered as revenue receipt and is not liable to be tax, as a result there will be no question of deduction of TDS. from the amount payable by the Developer to the tenant.
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