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TDS from compensation payable on compulsory acquisition of immovable property – Section 194LA

Any person responsible for paying to a resident any compensation on account of compulsory acquisition of any immovable property (other than agricultural land) is responsible for deducting tax at source.

Tax is to be deducted at the time of payment of aforesaid sum in cash or by cheque or draft whichever is earlier. Tax is not liable to be deducted at the time of crediting the account of payer i.e tax is deducted on cash basis only.

Tax is to be deducted at the rate of 10%. If the recipient of income doesn’t furnish his PAN to deductor then TDS is to be deducted @ 20%.
However tax is not deductible if the aggregate amount during a financial year does not exceed Rs. 2,00,000 (Rs. 2,50,000 from financial year 2016-17)
Assessee can apply to assessing officer for no TDS or TDS at lower rate under Section 197.

About Prateek Agarwal

Prateek Agarwal is a Practicing Chartered Accountant from Jaipur and been in practice for more than 7 years. He writes mainly about GST and Finance.

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