According to Section 11 read with Schedule III of the Income-tax Act, 2025, compensation is received by…

Section 11 read with Schedule III of the Income-tax Act, 2025 (formerly section 10(37) of the Income-tax Act, 1961) exempts capital gains on compensation for compulsory acquisition of urban agricultural land held by an individual or HUF, so the position is "It is exempt, subject to fulfilment of prescribed conditions." The conditions include use of the land for agricultural purposes by the individual (or a parent) or the HUF during the two years preceding transfer and receipt of the compensation on or after 1 April 2004.