The existing provision of section 194LA of the Act, inter-alia, provides that any person paying compensation shall deduct tax at source at the rate of ten per cent. on the compensation or enhanced compensation or consideration on account of compulsory acquisition of any immovable property (other than agricultural land) under any law for the time being in force subject to certain conditions specified therein.
The Central Government has enacted a new law namely Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, (‘RFCTLARR Act’) on 26th September, 2013 which came into force on 1st January, 2014. Section 96 of the RFCTLARR Act inter-alia, provides that income-tax shall not be levied on award or agreement made subject to limitations mentioned in section 46 of the said Act. Therefore, compensation received for compulsory acquisition of land under the RFCTLARR Act (except those made under section 46 of RFTCLARR Act), is exempted from the levy of income-tax.
The Board has issued Circular number 36/2016 dated 25th October, 2016 clarifying that compensation received in respect of any award or agreement which has been exempted from the levy of income-tax vide section 96 of the RFCTLARR Act shall not be taxable under the provisions of the Act, even if there is no specific provision of exemption for such compensation under the Act. However, the circular addressed only the matter pertaining to taxability of compensation received on compulsory acquisition of land and not tax deduction at source under section 194LA of the Act.
Thus in order to rationalise the provisions of the Act, it is proposed to amend the section 194LA to provide that no deduction shall be made under this section where such payment is made in respect of any award or agreement which has been exempted from levy of income-tax under section 96 (except those made under section 46) of RFCTLARR Act.
This amendment will take effect from 1st April, 2017.
[Clause 66]
Extract of relevant clause from Finance Bill, 2017
Amendment of section 194LA.
66. In section 194LA of the Income-tax Act, after the proviso and before the Explanation, the following proviso shall be inserted, namely:—
“Provided further that no deduction shall be made under this section where such payment is made in respect of any award or agreement which has been exempted from levy of income-tax under section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.”.
Sir
Compulsory accquisiton of land/residential property/comercial buliding by government
and
the notice for the development passes by concerned authority,,,,Under this act only
but sir My CA calculated Tax?????
What to do sir plz help sir
If non-agriculture land is compulsory acquisite by government within one year of its purchase will it be taxable or not?
residential land compulsorily aquired by Central govt. for national highway. and received compensation after deduction of TDS u/s 194LA.
Is it taxable or not ?
Pls reply
kindly reply my query, if an urban land is compulsorily acquired in FY 2010-11 but the compensation in awarded in FY 2015-16 will it be taxable as capital gain or exempted under RFCTLAAR Act?
sir please give me solution for the followings
non agricultural land acquired by govt for metro train route purpose. compensation received by land owner ,whether it is taxable or not . land acquired in 2016
please