Land acquisition compensation tax exemption applies to awards under the 2013 Act, subject to the statutory exception.

Compensation received under an award made under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is exempt from income tax under Section 96, except to the extent the payment falls within Section 46. The analysis also notes that Section 10(37) of the Income-tax Act, 1961 exempts capital gains arising from compulsory acquisition of agricultural land, and that CBDT Circular No. 36 of 2016 clarifies that compensation for compulsory acquisition of agricultural or non-agricultural land is not taxable under Section 96 subject to the statutory exception.

---

---

Issues: Whether compensation received under an award passed under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is liable to income tax.

Analysis: Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 provides that no income tax shall be levied on any award or agreement made under the Act, except in relation to Section 46. The Court also referred to Section 10(37) of the Income-tax Act, 1961, which exempts income arising from compulsory acquisition of agricultural land from capital gains tax, and to Circular No. 36 of 2016 clarifying that compensation received for compulsory acquisition of agricultural or non-agricultural land is exempt from income tax under Section 96, subject to the stated exception.

Conclusion: The compensation received under an award passed under the 2013 Land Acquisition Act is not exigible to income tax, save to the extent falling within Section 46.

---