Tds on compensation paid to tenants by builder

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This query is : Resolved

DEEPAK TABATA PANDA (Querist)

05 June 2015 Can u please let me know is tds needs to be deducted in case a builder pay compensation paid to tenants in case of redevelopment of property? is tds u/s 194I applicable in this case? is there any judgement given in this case? resolve my query as soon as possible?

Amol S Joglekar

Amol S Joglekar (Expert)

05 June 2015 No. TDS is NOT required to be done on such payment.

DEEPAK TABATA PANDA

DEEPAK TABATA PANDA (Querist)

05 June 2015 is there any case law regarding this? is this payment termed as hardship allowance? is payment needs to be paid lumpsum at one time or there is no restriction to pay compensation at any time during the financial year.

Amol S Joglekar

Amol S Joglekar (Expert)

05 June 2015 01. No case law is needed as the provisions are unambiguous.

02. The nature of payment is mentioned in the agreement entered into by and between the builder and the respective tenants. Accordingly it is designated as compensation or hardship allowance or otherwise.

03. Income tax Act has nothing to intrude into the mode of payment i.e. in lumpsum or piecemeal.

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