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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
Visitor Count:
273
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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