Refund of TDS deducted under 194LA
This query is : Resolved
30 May 2017
Rs 158958/ was deducted as TDs under 194LA by NHAI on payment of compensation of land& two shops in month of May 2016& December 2016.As per circular no36/2016 ft 26/10/2016 , no tax is to be deducted. Please guide me how I can refund my TDS and which ITR form is to be filled for A.Y. 2017-18
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27 June 2017
no clear reply received
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20 July 2025
Got it! Here’s how you can proceed to claim a refund of TDS deducted under Section 194LA (compensation on transfer of immovable property) when it should not have been deducted as per Circular No. 36/2016 dated 26/10/2016:
1. TDS Deducted but Not Applicable
As per Circular 36/2016, no TDS is to be deducted on compensation paid for acquisition of land/shops by certain government agencies like NHAI.
Since Rs. 1,58,958 was wrongly deducted, you are entitled to claim a refund of this amount.
2. Procedure to Claim Refund
File Income Tax Return (ITR) for AY 2017-18.
Declare the income (if any) under the head Capital Gains or exempt income, as applicable.
Report the TDS deducted under section 194LA as tax deducted (credit available) in the ITR.
The refund will be processed based on the excess TDS reflected.
3. Which ITR to File?
Usually, for individual or HUF with capital gains, file ITR-2 (if you have capital gains but no business income).
If you are a company or firm, other forms may be applicable.
For individuals with only capital gains and no business income, ITR-2 is the suitable form for AY 2017-18.
4. Additional Tips
Attach relevant details about the TDS like Form 26AS (showing the TDS deducted).
You may also attach a copy of Circular 36/2016 and any correspondence with NHAI if required (not mandatory but useful in case of queries).
Verify that TDS credit under section 194LA is reflected correctly in your Form 26AS before filing.
5. Follow-up
After filing the return, the Income Tax Department will process the refund and credit the amount to your bank account.
1. TDS Deducted but Not Applicable
As per Circular 36/2016, no TDS is to be deducted on compensation paid for acquisition of land/shops by certain government agencies like NHAI.
Since Rs. 1,58,958 was wrongly deducted, you are entitled to claim a refund of this amount.
2. Procedure to Claim Refund
File Income Tax Return (ITR) for AY 2017-18.
Declare the income (if any) under the head Capital Gains or exempt income, as applicable.
Report the TDS deducted under section 194LA as tax deducted (credit available) in the ITR.
The refund will be processed based on the excess TDS reflected.
3. Which ITR to File?
Usually, for individual or HUF with capital gains, file ITR-2 (if you have capital gains but no business income).
If you are a company or firm, other forms may be applicable.
For individuals with only capital gains and no business income, ITR-2 is the suitable form for AY 2017-18.
4. Additional Tips
Attach relevant details about the TDS like Form 26AS (showing the TDS deducted).
You may also attach a copy of Circular 36/2016 and any correspondence with NHAI if required (not mandatory but useful in case of queries).
Verify that TDS credit under section 194LA is reflected correctly in your Form 26AS before filing.
5. Follow-up
After filing the return, the Income Tax Department will process the refund and credit the amount to your bank account.
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