What is Section 194LA?
Section 194LA of Income Tax Act relates to the TDS provisions applicable on the payment of compensation at the time of acquisition of certain types 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 under Section 194LA
- 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 the 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 deduction of tax.
TDS Certificate
Deductors of tax shall issue a TDS certificate to the deductee in Form 16A on a Quarterly basis for TDS u/s 194LA. The due date to issue TDS certificates is 15 days from the due date of filing the 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 |
TDS Return
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 the case of TDS on non-salary payments TDS Return Form 26Q is to be filed. Due dates for TDS returns are as follows:
| Quarter | Due-Date |
| Q1 | 31st July |
| Q2 | 31st October |
| Q3 | 31st January |
| Q4 | 31st May |
FAQs
Compulsory acquisition is the power of the government to acquire land from its owner without the willing consent of the owner in order to benefit 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.
As per the circular issued by CBDT in 2016, such compulsory acquisition of land is exempt from Income Tax.
Hey @Dia_malhotra
As per section 194A, TDS on interest other than interest on securities is required to be deducted by any person other than Individual or HUF at the rate of 10%, when paid to a resident. No surcharge, education cess or SHEC shall be added to the above rate.
Hope this helps!
Hey @HarishMehta
TDS u/s 194J needs to be deducted by deductor other than an individual or a HUF, @ 10% on any amount paid or payable to any which is in excess of INR 30,000 as:
Hope this helps!
Hello @the_AK,
Against gross income, you can claim business expenses that you have incurred for earning that income. So you can claim this service fee as a business expense from the gross income received by you.
Hope this helps!
Hey @Bharti_Vasvani can you please help here?
Hello @Anuj_Agarwal,
TDS will be deducted by the company when the interest is actually paid on the securities, so at that time whoever is the owner of such security shall receive the interest and can claim credit of interest.
Hope this helps!
Hey @Anuj_Agarwal,
You can check out this article for more clarity:
Hope this helps!
I have respectable salary income and 1000 insurance commission…ie old commission…not claiming any expenses…can i show it as other income in itr1 or have to file itr 3
Hi @Shivam_B
If you have income from salary and income from insurance commission (business income), then you will be required to file ITR 3.
Itr 3 is so big…have to pay heavy charges…for filing…will it be defective if i do so ie reporting 1000 as other income in itr1 along with salary income…have closed down the insirance work since yesrs…i even contacted commssiom giving broker and closed my commission account…still they are showing in 26as wheress i am not receiving in real
Hi @Shivam_B
As per the recent utilities, ITD gives you the option to select only the schedules applicable to you while filing ITR.
Thus, you are not required to go through the entire ITR 3 form. You can also prepare and file ITR on Quicko, where you can upload form 16 and add commission income under the head “Business & Profession” and file ITR 3, without any charges as Quicko is a DIY platform helping individuals to file taxes.