I have received a certain amountof money as penalty refund from the builder for delay in giving possession of my flat.
Will this amount be included in my income for the year ,when in fact it is the penality amount for a delay of more than 2 years.
Is this amount taxable and will the amount be included in my taxable income.

Admin’s Response:

This amount is taxable under the head ‘Income from other sources’. However it will be discretionary on the part of the assessing officer if you can justify that it reduces your capital cost because of delay compensation.