TDS is Applicable on Interest on Delayed Agriculture Land Acquisition Payment


It is clear that agriculture land does not come within purview of section 194LA of the Income Tax Act .However, when the interest is paid to the agriculture land owner for delayed land acquisition , a controversy has arisen whether the interest on such delayed payment is liable to TDS and if yes, under what provision of the Income Tax Act. The main contention raised by the agriculture land is that since the payment is related to acquisition of agriculture land which is out of purview of TDS u/s 194LA , such interest should also be considered as part of compensation, and thus out of purview of section 194LA.

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