Clarification on income tax liability
3 years ago
Dear Sir,
I am AVM M K Guleria (Retd) writing to you to get some clarification on income tax.
1. Our family home is coming in a highway project and we are likely to get compensation from the govt soon. Is this compensation taxable?
2. Presently building is on my brother's name and we have decided to share compensation between two of us as and when it's transferred to his account. My brother will transfer my share to my account. Will I be liable to tax?
Thanks and regards
Jai Hind
A.Hi,
In both cases you are liable to pay taxes. For a detailed breakup please contact a chartered accountant.
In both cases you are liable to pay taxes. For a detailed breakup please contact a chartered accountant.
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Ayantika Mondal @ Prime Legal
Responded 3 years ago
A.Hi,
Yes you are required to pay taxes on capital gain through compensation. Since the property is held by your brother, he has to pay tax on the capital gains, whereas you have to pay regular income from the money you receive from your brother.
Yes you are required to pay taxes on capital gain through compensation. Since the property is held by your brother, he has to pay tax on the capital gains, whereas you have to pay regular income from the money you receive from your brother.
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A.Dear sir,
Please contact Chartered Accountant.
Please contact Chartered Accountant.
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Tanmoy Chattopadhyay
Responded 3 years ago
A.yes you are very much liable to pay the capital gain tax on the compensation amount that you receive due to the acquisition albeit compulsory.
Since your brother is having the property in his name I think the compensation money at the hand of your brother will be liable for capital gain tax but once it is transferred to you without you establishing it as joint property it will be difficult for you to take the advantage of declaring it as capital gain. So it might transpire that you might have to end up paying normal income tax for the share that you might receive.
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#freeLegalAdviceOnTax
Since your brother is having the property in his name I think the compensation money at the hand of your brother will be liable for capital gain tax but once it is transferred to you without you establishing it as joint property it will be difficult for you to take the advantage of declaring it as capital gain. So it might transpire that you might have to end up paying normal income tax for the share that you might receive.
#Tax
#freeLegalAdviceOnTax
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