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Section 194la compulsory acquisition

shabnam yasmin (article assisstant) (51 Points)

11 March 2014

plz everyone help me to solve this query-

In section 194 LA of compulsory acquisition will tds be deducted if the amount exceeds Rs. 2 lacs and there are mutiple owners holding the land ???

or else plz tell me the deduction is as per the no. of person holding the property or the whole amount???

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7 Replies

MANJULA (Article assisstant) (103 Points)
Replied 11 March 2014

TDS is to be deducted @ 10% on the compensation or enhanced compensation at the time of receipt of payment in any form i.e., cash, cheque or draft etc., which is not required if the amount received does not exceed Rs.2Lakhs. Hence, for compensation exceeding Rs.2Lakhs it is to be deducted at the time of receipt.

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CA Dauzi Pathan Imran Khan (Chartered Accountant in Practise) (1678 Points)
Replied 11 March 2014

TDS will be deducted if the compensation amount exceeds Rs.1,00,000/- during that financial year (singly or aggregate of payments) at 10%. If the compensation lies in 2 financial years, say 50,000 in 2013-14 and 55,000 in 2014-15, the TDS provisions do not attract.

As the section do not contains/ specify the manner of deducting tax for multiple owners, the TDS should be dedcuted subjectively(depends on each case).

MANJULA (Article assisstant) (103 Points)
Replied 11 March 2014

But as per Section 194LA of Finance Act,2013 no tax is to be deducted if the aggregate amount of such payment to the resident does not exceed Rs.2Lakhs.

shabnam yasmin (article assisstant) (51 Points)
Replied 11 March 2014

thanx a lot for ur reply!!! But if there are more than one person holding the land will there be no exemption to each of them. lets say suppose there are 4 people holding a land and the amount be 7 lacs then if we see the whole amount then TDS should be deducted but if amount is given to the 4 people then each gets Rs. 1.75 lacs which means it is under the limit of Rs. 2lacs. then what is right???? Read more at: /forum/section-194la-compulsory-acquisition-284796.asp#.Ux7OF9KSxOI

MANJULA (Article assisstant) (103 Points)
Replied 11 March 2014

The section says as follows:

No tax is required to be deducted where the amount of such payment or, as the case may be, the aggregate amount of such payment to a resident during the financial year does not exceed Rs.2Lakhs.

Hence, the aggregate amount to a resident should not exceed Rs.2Lakhs as per the agreement if any entered into.

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CA Dauzi Pathan Imran Khan (Chartered Accountant in Practise) (1678 Points)
Replied 11 March 2014

Originally posted by : MANJULA
	But as per Section 194LA of Finance Act,2013 no tax is to be deducted if the aggregate amount of such payment to the resident does not exceed Rs.2Lakhs.