TDS on Purchase a property (Agricultural Land)

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This discussion clarifies whether Tax Deducted at Source (TDS) under Section 194IA applies when a domestic company purchases agricultural land. The key factor is the classification of the land; if it's considered 'urban agricultural land' and thus a capital asset, TDS will be applicable on the purchase.

Ashish Kumar Pandey

Ashish Kumar Pandey (Querist)
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05 July 2025 Sir,
If a domestic company purchase a Agricultural Land of Rs. 80/- Lacs from 5 Co-Owner equally on August 2024 and payment made in July 2024 through demand draft each person individually.

TDS u/s 194IA Purchase on Property applicable or not.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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05 July 2025 If the agricultural land is classified as "urban agricultural land" (i.e., it doesn't meet the criteria for rural agricultural land), then it is considered a capital asset and its sale would be subject to TDS under Section 194IA.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 September 2025 Good luck...

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