Compulsory acquisition — capital gain arises in year of:
ADate of dispossession
BDate of acquisition notice (per relevant Section)
CReceipt of compensation (initial or enhanced)
DEnd of FY
Answer & Solution
Correct answer: C. Receipt of compensation (initial or enhanced)
1. Section 45(5) special rules for compulsory acquisition.
2. Capital gain in PY in which compensation (or part) first received from Government.
3. Enhanced compensation later: taxable in year of receipt; cost taken as nil.
_Source: ICAI BoS CA Final Paper 7, Ch 4 "Capital Gains"_
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