Section 46 RFCTLARR Act, 2013 — the law in short
What the courts have decided on section 46 RFCTLARR Act, 2013, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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L. Venkataramana Raju v. Union of India (Karnataka High Court) — where compensation is payable under the RFCTLARR Act, 2013, section 96 of that Act exempts it from income-tax and from TDS even though the land is not agricultural and section 10(37) cannot apply
High CourtHelps taxpayer
My client's commercial property was compulsorily acquired for a metro project and tax was deducted at source on the compensation. Section 10(37) does not help because the land is not agricultural. Is there anything else?
Yes — section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which provides that no income tax or stamp duty shall be levied on any award or agreement made under that Act except one under its section 46. The Karnataka High Court held that where the acquisition was initiated after 1 January 2014 the compensation had to be paid under the 2013 Act, and that on a conjoint reading of section 96 of that Act, CBDT Circular No. 36/2016 dated 25 October 2016, the second proviso to section 194LA of the Income-tax Act and section 10(37), such compensation is exempt both from income-tax and from tax deduction at source. The writ petitions were allowed, the awards and endorsements quashed, and a refund of the TDS with interest directed.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
