Payment of compensation on acquisition of certain immovable property [Section 194LA] under Deduction of Tax at Source :

(1) Section 194LA provides for deduction of tax at source by a person responsible for paying to a resident any sum in the nature of –

(i) compensation or the enhanced compensation or

(ii) the consideration or the enhanced consideration

on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land).

(2) Immovable property means any land (other than agricultural land) or any building or part of a building.

(3) The amount of tax to be deducted is 10% of such sum mentioned in (1) above.

(4) The tax should be deducted at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier.

(5) No tax is required to be deducted where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed Rs 2 lakh[ wef from 1st June 2016 – amount limit has been increased to Rs 2,50,000/- (FY 2016-2017 / AY 2017-2018 )].