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)

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)

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)

26 September 2025 Good luck...

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