Rural agricultural land exclusion shields enhanced acquisition compensation and section 28 interest when the land is not a capital asset.

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....Rural agricultural land situated beyond the prescribed municipal limits is excluded from the definition of a capital asset. The notes explain that an official Tehsildar certificate based on a technical survey may establish the requisite aerial distance where the Revenue offers no cogent rebuttal or independent measurement; acquisition by a development authority or development potential does not alter the land's character. Enhanced compensation for compulsory acquisition is therefore not chargeable under the capital gains provisions. Interest awarded under section 28 of the Land Acquisition Act is described as an accretion to land value and an integral part of enhanced compensation, so its tax treatment follows the underlying compensation rather than being separately taxed as income from other sources.....