Solatium is part and parcel of compensation that is payable for compulsory acquisition of land, which may fetch a better price in the market to the landowner
Solatium and interest are integral parts of compensation that is awardable to persons whose lands have been compulsorily expropriated
Section 30 Award of Solatium
The right to fair compensation and transparency in land acquisition, rehabilitation and resettlement act 2013
1) the collector having determined the total compensation to be paid, shall, to arrive at the final award, impose a Solatium amount equivalent to 100% of the compensation amount
ie Solatium amount shall be in addition to the compensation payable to any person whose land has been acquired
2) the collector shall issue individual awards detailing the particulars of compensation payable and the details of payment of the compensation as specified in the first schedule
3) in addition to the market value of the land provided under section 26, the collector shall, in every case, award an amount calculated at the rate of 12% per annum on such market value for the period commencing on and from the date of publication of the notification of the social impact assessment study under sub-section (2) of section 4, in respect of such land, till the date of the award of the collector or the date of taking possession of the land whichever is earlier
1) if a house lost in a rural area, a constructed house shall be provided as per the specifications of Indira Aawas Yojna, of 25 sqm, or Rs 1.65 lacks in lieu of house
2) if a house is lost in an urban area, a constructed house shall be provided of 50 sqm plinth area as per PWD norms or Rs 5.5 lakhs in lieu of house
3) one-time payment to each affected family to those who have an eligible candidate for employment
4) subsistence allowance if the affected families of Rs 3000/month for a year after displacement date, and if families belonging to scheduled cast or scheduled tribes, such families will get additional Rs 50,000
5) transportation cost of Rs 50,000 per affected displaced families
6) families having cattle she’d or petty shops will get one-time financial assistance
7) one-time grant for artisans, small traders of Rs 50,000
8) one-time resettlement allowance of Rs 50,000 after shifting the house
9) stamp duty and registration charges will be borne by requesting body for the first transaction of the rehabilitated person only
10) the acquiring body will provide the infrastructure in the rehabilitation and resettlement area, which includes the roads, drainage, panchayatghar, post office, samaj mandir, and other facilities as mentioned in the third schedule
11) all monetary value fixed above shall be entitled to be increased by 5% on the 1st January of each year unless the rate of inflation index is less than 5% of that year
12) above package will be applicable if the affected person accepts the same through a written consent
In view of the increased burden acquiring bodies may prefer to purchase land by negotiations rather than acquiring land under the provisions of the 2013 act
Solatium and Taxability
1) agricultural land in a rural area in India is not considered a capital asset
Therefore any gains from its sale are not taxable under the capital gains
2) under section 10(37) of the income tax act, capital gains on compensation received on compulsory acquisition of urban agricultural land is exempt from tax
3) interest received by the assessee is in the nature of income, such interest can be taxed under section 56(2)(vii)
4) Solatium under section 23(2) and interest on excess compensation under section 28 of the land acquisition act form part of enhanced compensation under section 45(5)(b) and, therefore, is subject to tax under section 45(5)
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