1. Anomaly between Land Acq Act & IT Act in case of acquisition of non-agricultural land

Anomaly between Land Acq Act & IT Act in case of acquisition of non-agricultural land

There is an anomaly between the Land acquisition Act and Income Tax Act in case of acquisition of non-agricultural land, as the said transaction should be exempt under the one act, it becomes taxable under another, Parliament was informed today.

By: | New Delhi | Published: August 11, 2016 9:30 PM
In other words, if the land under transfer is agricultural, the income remains exempt under the Income Tax act and the two acts remain synchronised, Yadav added. (PTI) In other words, if the land under transfer is agricultural, the income remains exempt under the Income Tax act and the two acts remain synchronised, Yadav added. (PTI)

There is an anomaly between the Land acquisition Act and Income Tax Act in case of acquisition of non-agricultural land, as the said transaction should be exempt under the one act, it becomes taxable under another, Parliament was informed today.

Certain anomalies between the provision of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act, 2013 and the Income Tax Act, 1961 have recently been brought to the notice of CBDT, Minister of State for Rural Development Ram Kripal Yadav said in a written reply in Lok Sabha

“..there is anomaly between the two Acts regarding the taxability of income (arising from compensation received in lieu of acquisition of land) to the extent the land under consideration falls in non-agriculture category,” Yadav said.

In other words, if the land under transfer is agricultural, the income remains exempt under the Income Tax act and the two acts remain synchronised, Yadav added.

“Only in respect of land other than the agricultural land for the purpose of the Income Tax Act, the anomaly creeps in since the Capital Gain arising therefrom becomes taxable under the Income Tax Act, while the same is stipulated to be exempt under the RFCTLAR Act,” he said.

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