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Section 194LA Payment made for compensation for acquiring certain immovable property

Section 194LA Explained

Section 194LA from the Income Tax Act refers to TDS requirements when paying compensation for certain immovable property acquisitions. If a person is paying a resident due to compulsory acquisition of any non-agricultural immovable property, they must deduct TDS at the rate of 10%.

TDS Deduction Time under Section 194LA

TDS under section 194LA is deducted when the total annual payment is more than INR 2,50,000. Deduction occurs during payment, regardless of payment method. 

TDS Rate under Section 194LA

  • TDS is deducted at 10% under section 194LA of the Income Tax Act, 1961.
  • No additional charges apply, so TDS is at the base rate.
  • If no PAN is provided, TDS rate is 20%.

When TDS under Section 194LA is Not Deducted

Section 194LA TDS deductions are not required when: 

  • Payment is made to a non-resident.
  • Total payment during the fiscal year is below INR 2,50,000.
  • The payment concerns an award/agreement exempt from tax.
  • The recipient has secured a No / lower tax deduction certificate via Form No. 13.

TDS Certificate 

Tax deductors must provide a TDS certificate to the deductee quarterly in Form 16A for TDS u/s 194LA. This certificate can be downloaded from TRACES. The schedule for receiving TDS certificates is as follows: 

Quarter

Due Date

April to June

15th August

July to September

15th November

October-December

15th February

January to February

15th June

TDS Return

Every person deducting TDS must file a TDS return quarterly. Details required include TAN, TDS amount, payment type, and deductee's PAN. For non-salary TDS payments, Form 26Q should be used. TDS return due dates are: 

Quarter

Due-Date

Q1

31st July

Q2

31st October

Q3

31st January

Q4

31st May




 

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