Capital gain on land

?????

so prior to selling the land , the person was not working at all? and has zero income? 

how cound he survive with zero income?

Yes he is living with his son and who is employed. This guy is a petty farmer.

Please file the income tax return with NIL Taxable income and get refund of TDS.

If it files with NIL income it is always defective return

Please file the income tax return with NIL Taxable income and get refund of TDS

Pl. answer to the point if you can

- 194LA does not applies on agricultural land, its applied on öther than agricultural land"

- if the person has NIL income, then what income did he claimed for PAN? because PAN is not issued for exempted income earners, 

- to claim TDS, the assesee has to declare a Bank account, where interest income is earned, ( a single rupee interest is also an income)

Hi Prasobh,

Please file a Return in form no. ITR 2,  and claim the TDS deducted.  As per my opinion, since the land was far away from the Municipality, it is a rural agricultural land in terms of Section 2(14). Accordingly, Section 194 LA which relates to deduction of Tax at Source on acquisition of certain immovable property does not apply and TDS should not have been deducted. Request you to kindly cross check with Form 26AS of the Farmer. 

Section reference : 

Payment of compensation on acquisition of certain immovable pro-perty77.

194LA. Any person responsible for paying to a resident any sum, being in the nature of compensation or the enhanced compensation or 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 agricultural land), shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax thereon:

Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed two hundred thousand rupees.

Explanation.—For the purposes of this section,—

(i)  "agricultural land" means agricultural land in India including land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2;

(ii) "immovable property" means any land (other than agricultural land) or any building or part of a building.

Regards,

Madhav

But still the acqusition is done by government and they are deducting TDS regardless of the status of Agricultural Land.

Mr.U S Sharma, I am asking a real situation. Please understand. I am not looking for a bug fixing, instead a professional answer

Hi Prasobh, 

In such a case, you shall be entitled for refund, as the provisions of this Section do not apply to this case. Ideally, there should have been no deduction, but since it is, you can claim the refund for the same. 

I would still advise you, to contact your Jurisdictional AO/Commissioner for this case and act accordingly. 

Best Regards,

Madhav

@ Prasobh 

filing the ITR for  refund of TDS is normal process and ITR is not defective  under  law, as there are  certain other little incomes also,  like bank  interest  etc,