194LA TDS ON COMPULSORY ACQUISITION

TDS deducted on INTEREST on compensation received on compulsory acquisition of agriculture land. Compensation already received Rs 56 lakh some years ago now INTEREST received Rs 20 lakh and TDS deducted on this interest @ 10%= 2 lakh U/s 194 LA. Is this interest taxable or exempt. This TDS IS REFUNDABLE OR NOT???
Replies (8)
Quick Summary
This discussion clarifies the taxability of interest received on compensation for compulsory acquisition of agricultural land under Section 194LA. While TDS is deducted, the interest income, along with any enhanced compensation, is generally exempt under Section 10(37) of the Income Tax Act. It is advisable to file a tax return to claim the deducted TDS as a refund, especially if the net interest income (after deducting expenses under Section 57) falls below the basic exemption limit.

Yes, It's refundable up to 50 % -Simply Means 50% is taxable.

You get relief of 50% u/s 57 -Interest on enhanced compensation.

Compulsory Acquisition -194LA-Full Amount is Exempt.
Interest received on compensation or enhanced compensation is exempt income as per section 10(37) of the Income Tax Act.
There are so many case laws in this regard.

Interest is charitable to tax Ji, Presently not added to the category of exempt income.

For filing better practice -Add the interest income and deduct 50% u/s 57.

 

You are right Ji If cannot refund the same like otherwise.

Yes TDS is refundable at the time of filing return
As Mr. Praveen has said that the land is an agricultural land, and if the land is agricultural land as per the provision of IT Act., then the interest amount decided by the court is exempt as per section 10(37). The relevant part of the section is as under,
10(37)..............
[iv] such income has arisen from the compensation or consideration for such transfer received by such assessee on or after the 1st day of April, 2004.

Explanation.—For the purposes of this clause, the expression "compensation or consideration" includes the compensation or consideration enhanced or further enhanced by any court, Tribunal or other authority;


In this case it is better to file the return and claim the TDS amount as refund. If you get any notice from the department and if your case any demand is raised in assessment, then you can file appeal before the concern appellate authority.

Roy Ji -Exactly You Right.

 

But, If the Interest amount after deducting expense u/s 57 is below the Basic Exemption Limit - Then better file like I said.

 

Then there is no chance for assessment or technically.

 

Sometimes, Provision Academically and Practically -Have Changed based on the problem.

Thanks for help. But plz refer the case of MOVALIYA BIKHUBHAI BALABHAI. is it linked to my case????. plz refer and answer.

Sure, I check & revert.

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