Section 194L of ITA, 1961 : Section 194L: [Omitted]

Explanation using Example

Imagine a scenario where a government agency decides to acquire land for a public infrastructure project. Prior to June 1, 2016, if the agency paid compensation to a landowner for the acquisition of this land, which is a capital asset, the agency would have been required to deduct tax at source under Section 194L of the Income-tax Act, 1961. However, since this section has been omitted with effect from June 1, 2016, no tax would need to be deducted at source on such compensation payments made after this date. So, if the land was acquired on June 15, 2016, the compensation paid to the landowner would be without the tax deduction that would have been required under the now-omitted Section 194L.