TaxTMI 
TaxTMI 
Furtherance to the order of RERA, whether the Delay Interest on account of delayed possession received by Allottee from the Promoter/Builder is Taxable under IT Act? If so, how can the exemption are availed?
Whether Delay Interest in delayed possession is Taxable / Exempted under IT Act ?
11 Feb 2025 
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Delay interest on possession compensation is taxable as income from other sources and taxed on receipt.
Delay interest received by an allottee for delayed possession under regulator orders is taxable as Income from Other Sources, being revenue in nature rather than a capital receipt. Taxation is on receipt; taxpayers can claim allowable deductions against this income and may, where the award covers multiple past years, seek to spread the taxable amount across those years. Capital gain exemptions and other specified exemptions do not apply; report the amount as income from other sources in the return and claim case specific deductions. (AI Summary)
Delay interest received by an allottee for delayed possession under regulator orders is taxable as Income from Other Sources, being revenue in nature rather than a capital receipt. Taxation is on receipt; taxpayers can claim allowable deductions against this income and may, where the award covers multiple past years, seek to spread the taxable amount across those years. Capital gain exemptions and other specified exemptions do not apply; report the amount as income from other sources in the return and claim case specific deductions. (AI Summary)