What is Section 194LA?
Section 194LA relates to the TDS provisions applicable on the payment of compensation at the time of acquisition of certain type of immovable property. Any person, who is 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, deduct TDS at the rate of 10%.
When to deduct TDS under Section 194LA?
The payer is liable to deduct TDS u/s 194LA if the aggregate amount of payment during the financial year exceeds INR 2,50,000. The payer shall deduct TDS within earlier of the below mentioned dates –
- At the time of payment of the amount in cash; or
- At the time of payment of the amount in cheque or draft or any other mode.
Rate of TDS
- The Deductor is liable to deduct TDS @ 10% under section 194LA of the Income Tax Act, 1961.
- No surcharge, education cess or SHEC shall be added to the above rate. Hence, TDS shall be at the basic rate.
- The rate of TDS will be 20% in all cases, if PAN is not quoted by the deductee.
Cases where there is no need to deduct TDS under Section 194LA
TDS is not deductible under section 194LA in following cases when –
- The person is paying an amount to a ‘non-resident’ person.
- Aggregate consideration during the Financial Year is less than INR 2,50,000.
- Payment is in respect of any award / agreement which is exempt from income tax.
- The payee has filed an application in Form No. 13 to the Assessing Officer and has obtained a certificate for No / lower deduct of tax.
Deductors of tax shall issue TDS certificate to the deductee in Form 16A on Quarterly basis for TDS u/s 194LA. The due dates to issue of TDS certificates is 15 days from due date of filing TDS return. Deductor can download TDS Certificate from TRACES. The certificate shall be given on a quarterly basis. The due dates for receipt of TDS certificates are as below:
|TDS For Quarter||Due-Date|
|Q1 April to June||15th August|
|Q2 July to September||15th November|
|Q3 October-December||15th February|
|Q4 January to February||15th June|
Filing TDS returns is mandatory for all the persons who have deducted TDS. TDS return is to be submitted quarterly and various details need to be furnished like TAN, amount of TDS deducted, type of payment, PAN of deductee, etc. In case of TDS on non salary payments TDS Return Form 26Q is to be filed. Due dates for TDS returns are as follows:
Compulsory acquisition is the power of government to acquire the land from its owner without the willing consent of owner in order to benefit the society.
You need to file a TDS refund claim when the deductor has deducted more tax than the actual liability. You can claim the difference amount by filing an income tax return.