Discuss the relevant provisions of the Income-tax Act, 1961, with respect to collection/deduction of tax in the following situations: (i) Mr.…
CA Final · Direct Tax Laws and International Taxation · PYQS · November 2024
Discuss the relevant provisions of the Income-tax Act, 1961, with respect to collection/deduction of tax in the following situations: (i) Mr. Bhavan, an individual purchased urban land on 12.07.2014 which was compulsory acquired by Maharashtra State Government on 10.04.2022. The compensation for acquisition was fixed at 2,40,000, which was paid to Mr. Bhuvan on 10.04.2023. Against the order of court, the compensation was enhanced by - 50,000 and paid to Mr. Bhuvan on 10.12.2023.
Suggested Answer and Working Notes:
(i) As per section 194LA, Maharashtra State Government is required to deduct tax at source @10% on the entire sum of 2,90,000 on 10.12.2023, being the date on which enhanced compensation of 50,000 is paid to Mr. Bhuvan on account of compulsory acquisition of urban land since aggregate amount of compensation including enhanced compensation exceeds - 2,50,000 during the F.Y. 2023-24.
Topics: Deduction, Collection and Recovery of Tax
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