PwC Alert (Issue 67): Compulsory land acquisition compensation: Is it taxable?

Issue 67 : September 2007

Over the years, land has been compulsorily acquired by the Government for the purpose of the country’s economic development. Under the Federal Constitution, the Government must pay adequate compensation to the landowner in all compulsory land acquisitions by the Government. Often, the controversial issue in such acquisitions is the determination of the quantum of compensation, which is the market value as provided in the Land Acquisition Act 1960. Once the compensation amount is determined and agreed upon, the next question is whether the compensation is a revenue receipt which is subject to income tax for the disposer/recipient.

Compulsory land acquisition by the Government – Is the compensation received taxable on the disposer? Read more in issue 67.

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