TaxTMI 
TaxTMI 
Interest payments under the Land Acquisition Act, 1894--Deduction of tax at source under section 194A of the Income-tax Act, 1961--Authority responsible for deduction--Regarding
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....rding Circular No. NIL Dated 21/9/1994 To All Chief Commissioners of Income-tax All Directors-General of Income-tax. Sir, I am directed to say that it had recently come to the notice of the Board that there was no uniform practice in vogue in the matter of deduction of tax at source from interest payments awarded by the courts of law in land acquisition cases. At certain places, such deduct....
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.... 194A of the Income-tax Act, 1961, should be that of the Collector (Land Acquisition) or any other authority empowered under the Land Acquisition Act, 1894, to acquire land for a public purpose as laid down by that Act. When the concerned parties, whose land has been acquired, go to the court of law, seeking higher compensation (with interest) and the court allows their claims, the concerned autho....
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....at the procedure outlined in para 2 above is uniformly followed by all of them. 5. Hindi version will follow. Yours faithfully, (Sd.) Rajesh Chandra, Under Secretary, Central Board of Direct Taxes. Extract The question for consideration is as to who is the person responsible for deduction of tax at source for the purpose of section 204 of the Income-tax Act, 1961, in the case of payment of....
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....onsible for paying income by way of interest is the Land Acquisition Collector who had the money in his possession and was responsible for making the payment of that income to the petitioners . . . The court is acting only as a conduit for getting the payment to the petitioner in execution of a decree passed in his favour." In view of the above, we confirm the views expressed by us earlier, referr....