The 60-second version
Section 194LA requires 10% TDS on payment of compensation on compulsory acquisition of immovable property under any law — distinct from 194IA voluntary purchase.
194LA is authority deductor — not buyer-seller voluntary deal
Section 194LA applies when government or specified authority pays compensation on compulsory acquisition of immovable property.
Authority deducts 10% TDS — capital gains may still arise; Section 54/54F may apply if reinvested.
Voluntary lane: Section 194IA guide.
Property TDS matrix
| Section | Rate | Trigger |
|---|---|---|
| 194LA | 10% | Compulsory acquisition |
| 194IA | 1% | Voluntary purchase > ₹50L |
| 194IB | 5% | Individual tenant rent |
| 195 | Treaty+ | NRI seller voluntary |
194LA sequence
Acquisition order
Authority notice.
PAN to authority
Avoid 20% TDS.
Receive net
Gross minus 10%.
26AS
Verify TDS credit.
ITR CG
Declare gain + exemption.
Flow
194LA kit
- Acquisition order.
- Compensation letter.
- PAN.
- 26AS.
- 54/54F proof if claimed.
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Section 54
Reinvest in residential house within window — may exempt LTCG despite 194LA TDS.
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0 of 4 checked
Voluntary sale?
194IA or normal CG — not 194LA.
No PAN?
20% per Section 206AA.
Agricultural land?
194LA applies to compulsory acquisition of any immovable property.
TDS refund?
If no taxable gain — claim in ITR.
Inherited land?
Cost = previous owner — indexation applies.
NRI?
Still 194LA if authority pays resident owner.
Your tax year is already running.
RNOR status, exit timing, and DTAA benefits all depend on decisions you make before you land. Don't guess.