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Deduction TDS at the time of purchase of property, buyer liability

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ANIL KUMAR KHETAN

PROPRIETOR

362 Points Posted on 03 December 2023

Residential house in joint name of husband and wife . Consideration price determine all property above fifty thousand . purchaser ( Buyer) liability TDS @ 1 percentage or not this type transaction , please clarify the position

Replies (2)

Quick Summary

This discussion clarifies the buyer's liability for Tax Deducted at Source (TDS) when purchasing immovable property. According to Section 194-IA, TDS at 1% is applicable if the property's consideration exceeds £50 lakh. If the property value and stamp duty are both below this threshold, no TDS deduction is required. The responsibility for deducting TDS generally falls on the first holder of the property.

Ayyappa Peteti

Employment

26 Points Posted on 04 December 2023

Pls refer below to the extract of the section for the deduction of TDS for immovable property.

No deduction shall be made if the consideration amount is less than Rs 50 lakhs.

Provisions of Section 194-IA:

(1) Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax thereon.

(2) No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property and the stamp duty value of such property, both, is less than fifty lakh rupees.