The Income-Tax Appellate Tribunal’s (ITAT) Mumbai bench recently held that the rental compensation received from a builder due to a redevelopment project is not taxable in the hands of the former flat owner. ITAT adopted this stand even as the taxpayer, the former flat owner, had not taken another accommodation on rent but had moved in with his parents
Typically, when a building goes in for redevelopment, the flat owners are either provided with alternate accommodation by the builder or more commonly paid a monthly rental compensation. The ITAT held the rental compensation is a ‘capital receipt’ and not a ‘revenue stream of income, thus it is not taxable in the hands of the former flat owner. This order, which followed a similar order passed by the Mumbai bench earlier, will come as a relief to Mumbaikars
https://timesofindia.indiatimes.com/city/mumbai/rent-paid-by-builder-in-redevelopment-cases-not-taxable-itat-mumbai/articleshow/99798363.cms?from=mdr
Source: Times Of India
