No TDS on Compulsory Acquisition of Land upto 2 Lakhs

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Finance Bill 2012-13 has brought an amendment which will affect beneficially a large number of persons whose land is , these days , compulsorily acquired by state government and other governmental organization as for various use .

Under the existing provisions of the section 194LA of the Income-tax Act, a person tdsresponsible for paying any compensation or consideration for compulsory acquisition of immovable property (other than agricultural land) is required to deduct tax at the rate of 10% in case the consideration exceeds one lakh rupees.

This amendment will take effect from 1st July, 2012.