tds on compensation for temporary shiftment

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prerna agarwal (Querist)
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14 January 2011 My client has paid a lumpsum amount as a compensation to the landlord for temporary shifting from the land ( say for 2 years) which is jointly owned by both the client and the above landlord.The client is constructing housing complex on the land and will provide an permanent accomodation in that complex to the landlord after the construction is over.Is the amount paid to the landlord liable for tds deduction...If yes, under which section?

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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16 January 2011 TDS does not apply on compensation payment.

CA Chandresh Agrawal

CA Chandresh Agrawal (Expert)
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17 January 2011 Miss Prerna as per my view this consideration in not covered under TDS because there is no such specific provision in income tax to cover this type of receipt. Though there is two sections 194L & 194LA in income tax which covered compensation but it is for compulsory acquisition of land under any law time beign in force. But as in your case there is no compulsion for such acquisiton this provision is not apply and hence no liability for TDS arises.

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