Section 194LA - Payment of compensation on compulsory acquisition of any immovable property (other than agricultural land) - Income Tax - Ready Reckoner - Income Tax

Section 194LA : Payment of compensation on compulsory acquisition of any Immovable Property (other than Agricultural Land) Any person responsible for paying to a resident any sum, being in the nature of (i) compensation or the enhanced compen sation (ii) the consideration or the enhanced consideration on account of compulsory acquisition under any law for the time being in force, of any immovable property (other than agricultur al land), shall deduct income-tax thereon. Immovable property means any land (other than agri cultural land) or any building or part of a building. Agricultural land for the purposes of this section means any land situated in India including urban agricultural land. Time of Deduction At the time of payment of such sum in cash or by cheque or by any other mode Rate of TDS 10% of such compensation amount. Threshold Limit No tax is required to be deducted where the amount of such payment or the aggregate amount of such payment to a resident during the financial year does not exceed ₹ 2,50,000/-. Non-Applicability w.e.f. 01.04.2017, No deduction shall be made under this section where such payment is made in respect of any award or agreement which has been exempted from levy of income-tax under section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. however this exemption is not available in case when land is purchased through private negotiations by a person other than a specified person under section 46(1) of said act. Note: No TDS where amount does not exceed 2,50,000 during a Financial year. Question of deducting tax at source arises at the time of making payment and it has nothing to do with date of award of compensation.