Tds , itr for refund

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Manoj Tayade (Querist)
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22 August 2016 I request you expert sir's, to ans my query,,,,,,,,
the case is..
1. Rural Agriculture land transfer to government,
2. compulsory acquisition received,
3, TDS charged on it @10%,
4. Now i want to file ITR for refund ,,and I DO NOT HAVE THEIR SALE/PURCHASE DEED. for the cost of land...

pls help me

Soumitra Basu

Soumitra Basu (Expert)
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23 August 2016 SALE OF RURAL AGRICULTURAL LAND IS EXEMPT FROM THE DEFINITION OF CAPITAL ASSET PROVIDED IT FULFILL CERTAIN CONDITIONS

Manoj Tayade

Manoj Tayade (Querist)
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23 August 2016 not sold its compulsory acquisition by govnt and compensation received by farmer (owner of land) .but Govnt charged tds on it @10%. and I want to file ITR for refund .. now give your suggestions pls

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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27 July 2025 Got it! Since the land was compulsorily acquired by the government and TDS of 10% was deducted on the compensation, here’s what you need to know about filing ITR for refund, especially when you don’t have the sale/purchase deed (which makes sense here as it’s compulsory acquisition, not a normal sale):

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### Key Points:

1. **Compulsory Acquisition Compensation & Taxability**

* Compensation received on compulsory acquisition of rural agricultural land is **exempt** from capital gains tax if the land is used for agricultural purposes and fulfills certain conditions under **Section 10(37)** of the Income Tax Act.
* If exempt, the income is not taxable, but the government still deducted TDS at 10% — this is common as TDS is deducted on the gross amount.

2. **Claiming Refund**

* Since the income is exempt but TDS was deducted, you can **file Income Tax Return (ITR)** to claim refund of the TDS deducted.
* File ITR for the relevant Assessment Year (AY) in which compensation was received.

3. **No Sale/Purchase Deed?**

* In compulsory acquisition, there is no sale deed. You don’t need a sale deed; instead, you can use:

* The **award/notification letter** from government regarding acquisition
* The **receipt of compensation** payment
* Any communication/letter evidencing the acquisition and compensation

4. **Documentation to Support Refund Claim**

* Attach proof of TDS deducted (Form 16A or TDS certificate)
* Attach compensation receipt or bank statement showing receipt of compensation
* Attach copy of government notification/award for acquisition (if possible)
* Explain in your return or in a separate statement that this is compulsory acquisition, compensation is exempt under Sec 10(37), and hence tax deducted is refundable.

5. **Filing ITR**

* Use ITR-1 or ITR-2 depending on other sources of income.
* Declare **nil income** from capital gains or exempt income as applicable.
* Mention TDS amount under ‘TDS on other income’ or ‘TDS on capital gains’ as per form.
* Claim refund for TDS deducted.

6. **Follow-up with IT Dept**

* After filing, check Form 26AS for TDS credit.
* Refund process usually takes a few months.
* If delay, you may follow up with Income Tax department.

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### Summary:

| Step | Action |
| ---------------------------- | -------------------------------------------------------------- |
| Confirm exemption status | Compulsory acquisition compensation is exempt under Sec 10(37) |
| Gather documents | Govt award, TDS certificate, compensation receipt |
| File Income Tax Return (ITR) | For relevant AY, report exempt income, claim TDS refund |
| Submit ITR without sale deed | Use alternate proofs as explained |
| Track refund status | Monitor income tax website and Form 26AS |

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**If you want, I can help draft the relevant explanation note or guide you step-by-step to fill the ITR form.** Would you like that?

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