Section 194IA of IT Act, 1961 - TDS on Sale of Immovable Property

CA Piyush Agarwal , Last updated: 18 January 2023  

Section 194IA - Applicability

Section 194IA is inserted by Finance act 2013 and it is applicable from 01st of June, 2013.

A person who is purchasing any immovable property (other than agricultural land) from a resident is required to deduct TDS @1% from the amount payable.

Section 194IA not applied

On Installments or Loan

If the purchase value is greater than Rs. 50 lakhs then TDS is to be deducted from the first instalment itself and for each and every instalment. The purchaser should not wait for the aggregate instalment amounts to exceed Rs. 50 lakhs.

The view that TDS is to be deducted from final instalment or after exceeding Rs. 50 lakhs are not right.

If the purchaser has availed loan from a bank and bank pays directly to the seller, then it’s also considered as a payment and TDS needs to be deducted on date of such payment to seller.

The date of payment of EMI by buyer to bank is irrelevant.


Due Date of TDS Payment and Form 26QB

The deductor i.e. the purchaser of property has to file form 26QB which is a Challan cum declaration statement within 30 days from the end of the month in which payment is made.

No separate TDS return is to be filed in respect of such deduction.

Non-Resident Indian case

Example-1: Mr. Gayle, non-resident, sold his residential building situated at Jaipur, Rajasthan to Mr. Rahul for a total consideration of ₹ 2.50 crore.

In such a case, Mr. Rahul will make the payment to Mr.Gayle after deduction of tax @20% plus surcharge and Health & Education Cess @4% under Section 195.

Section 194-IA does not apply where the payment is made to a non-resident.

Example-2: Mr. Sachin, resident in India, sold his house situated in Jaipur, Rajasthan, to Mr. John who is resident of USA for a total consideration of ₹ 4.20 crores.


In that case, Mr. John is required to deduct TDS @1% under section 194-IA while making payment to Mr. Sachin.

Other Points

Article has been compiled by CA Ayush Agarwal & CA Piyush Agarwal

Published by

CA Piyush Agarwal
Category Income Tax   Report

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