S 197 and S 194LA Video Lecture | Income Tax for assessment (Inter Level) - Taxation

Ans. S 197 and S 194LA are two different sections under the Indian Income Tax Act. Section 197 deals with the provision of obtaining a certificate for lower deduction or no deduction of tax at source. It allows certain taxpayers to apply for a certificate from the Income Tax Department, stating that tax should be deducted at a lower rate or no deduction should be made on specific payments. This provision is mainly applicable to individuals who have income from different sources and want to avoid excessive TDS (Tax Deducted at Source) deductions. On the other hand, Section 194LA pertains to the taxation of payment of compensation on acquisition of certain immovable property. It requires the person responsible for making the payment to deduct tax at the rate of 10% before making the payment to the recipient. This provision is applicable when the government acquires a property and compensates the owner for it.

Ans. To apply for a certificate under Section 197, you need to follow these steps: 1. Visit the official website of the Income Tax Department. 2. Look for the option to apply for a certificate for lower deduction of TDS. 3. Fill in the required details such as your personal information, income details, and reasons for seeking a lower TDS deduction. 4. Attach relevant documents supporting your application, such as income tax returns, proof of income, and financial statements. 5. Submit the application online. 6. The Income Tax Department will review your application and may conduct an assessment if necessary. 7. If approved, you will receive a certificate stating the lower TDS deduction rate or exemption from TDS.

Ans. Yes, compensation received on the acquisition of immovable property is taxable under Section 194LA of the Indian Income Tax Act. According to this section, the person responsible for making the payment is required to deduct tax at the rate of 10% before making the payment to the recipient. The recipient can be an individual, a Hindu Undivided Family (HUF), or any other person. The tax deducted at source (TDS) is then deposited with the government on behalf of the recipient. It is important to note that the tax is deducted on the total amount of compensation paid, including any additional amounts or interest, if applicable.

Ans. Yes, you can claim a refund of the TDS deducted under Section 194LA if you are eligible for it. To claim a refund, you need to file an income tax return for the relevant assessment year. In the income tax return, you can provide details of the TDS deducted and claim a refund of the excess tax deducted, if any. The refund will be processed by the Income Tax Department after the verification of your return. It is important to ensure that you have all the necessary documents and proofs to support your claim for a refund. It is advisable to consult a tax professional or chartered accountant for assistance in claiming the refund.

Ans. No, there are no specific exemptions or deductions available under Section 194LA for the taxation of compensation on the acquisition of immovable property. Section 194LA mandates a flat rate of 10% tax deduction at source (TDS) on the total compensation amount paid for the acquisition of immovable property. This includes any additional amounts or interest paid, if applicable. However, it is important to note that the recipient of the compensation can claim any eligible deductions or exemptions while computing their overall taxable income in their income tax return. These deductions and exemptions would be applicable as per the regular provisions of the Income Tax Act, separate from the TDS deduction made under Section 194LA.