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Deduction of tax from payment made for acquisition of property (Section 194-IA)
Category: Income Tax, Posted on: 02/08/2024 , Posted By: CA Sunil Arora
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Income Tax Section 195IA


  • Section 194-IA of the Income Tax Act, 1961 primarily provides for deduction of tax at the rate of 1% of consideration paid to a resident for acquisition of an immovable property.
  • The said provision is presently applicable only in case where the consideration paid or Stamp duty value of the property is equal to or more than ₹ 50 lakhs. It is pertinent to note here that in case of more than one buyer or seller the aforesaid limit of ₹ 50 lakh was calculated for each buyer and seller individually irrespective of the fact that the gross value of the property is more than ₹ 50 lakhs.
  • The Finance Bill, 2024 proposes to bring amendment to the aforesaid section. The said amendment introduces a new proviso in the said section as a result of which the liability to deduct tax at the rate of 1% will become applicable in case the consideration paid or SDV of the property is more than ₹ 50 lakhs even if the individual consideration paid by one buyer or one seller is less than the said threshold limit.
  • In other words with effect from 01.10.2024 it is proposed that the aforesaid limit of ₹ 50 lakhs for application of the provisions with respect to TDS u/s 194 IA will be for the entire property and not in accordance with the consideration being paid by one or more co-buyer as the case may be.


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