11 June 2019
If immovable property , Land , is purchases from Govt.& value exceeds Rs.50 lacks , Is TDS u/s 194 IA applicable. Nothing has mentioned in sec 194IA. Thanks,
12 June 2019
An issue was came up for hearing before Hon’ble High Court of
Keral in case of M.C. Thomasv. District Collector reported in (2014) 49 Taxmann.Com 109 (Keral)/(2014) 264 CTR 437 (Keral),
Whether, tax would liable to be deducted on sale consideration under section 194-IA or 194 LA, where assessee transferred its
land to Government at agreed/negotiated price exceeding ₹ 50
lakh?
“Section 194-IA, read with section 194LA, of the Income-tax Act,
1961 contains provision regarding deduction of tax at source on Payment on transfer of certain immovable property other than
agricultural land. The Petitioner transferred his land to Government and received agreed/negotiated sale consideration.
He filed writ petition for a direction to disburse whole of sale consideration without deduction of tax under section 194LA or
194-IA. The issue was whether, since there was no land
acquisition, tax at rate of 10 per cent was not liable to be
deducted on sale consideration under section 194LA.
The
petitioner concedes that he has agreed to receive sale
consideration at the rate of ₹.17 lakhs per cent and the total sale consideration for 3.98 cents comes to about ₹.67, 66,000/-. The
petitioner is fully justified in his contention that tax is not liable
to be deducted at the rate of 10% of the sum as consideration
under Section 194-IA of the Act since there is no land acquisition.
But tax is certainly liable to be deducted from the sale consideration payable to the petitioner at 1% of the sum under
Section 194-IA of the Act since the total sale consideration
exceeds ₹.50 lakhs. The obligation to deduct tax under Section 194-IA of the Act arises when consideration is payable to a
resident transferor on the transfer of immovable property
otherwise than by land acquisition. It is upto the petitioner to submit his return before the jurisdictional assessing officer and
take the proceedings to a logical end in the deetermination of his
tax liability. The dictum in Infopark Kerala v. Asst. CIT reported in [2010] 187 Taxman 1 (Ker.) case reported W.A.No.2243 of 2008 is clearly distinguishable in as much as the same dealt with the
deduction of tax under Section 194 LA of the Act in the absence of a compulsory acquisition. The District Collector and the Special
Tahsildar (Land Acquisition) are therefore directed to disburse
the sale consideration to the petitioner after deducting income tax at 1% of the sum under section 194 IA of the Act”.
12 June 2019
Madam , Thanks for reply. The case you referred to relates to transferred of land to Government. What will be the position in case of purchases of Land From Government. Thanks,
CAclubindia
