1% TDS applies on immovable property over Rs 50 lakh
Real Estate

1% TDS applies on immovable property over Rs 50 lakh

1% of Tax Deduction at Source (TDS) will be applied on non-agriculture immovable properties over Rs 50 lakh based on the sale price or the stamp duty after an amendment in the Income Tax Act.

Currently, the TDS is deducted based on the consideration value of the immovable properties. There is no consistency in the Income Tax Act regarding the levy of the TDS.

Nirmala Sitharaman, Minister of Finance, has proposed the amendment to do in the anomaly in the law.

According to the Finance Bill 2022 and the Budget, the government proposes to amend Section 194-IA of the Income Tax Act to remove inconsistency with Section 43CA and 50CA of the law.

According to the Finance Bill, Section 194-IA of the Act provides a tax deduction on the payment on transfer of some immovable properties apart from agricultural land.

Sub-section I provide for deduction of tax by any person responsible for paying a resident any amount of consideration for transfer of any immovable property during the time of credit or payment of the amount to the resident at 1% of amount as the income tax.

Sub-section 2 provided no deduction of tax where the consideration of the transfer of any immovable property is under Rs 50 lakh.

According to the document, TDS has to be deducted from the amount of consideration paid by the transferee to the transferor. The section does not count the stamp duty value of the immovable property, while Sections 43CA and 50C of the Act, for the computation of income under profit and gains from business and capital gains, respectively, the stamp duty value is also to be considered.

The Ministry highlighted the inconsistency in the provisions of Section 194-IA and Section 43CA and 50C of the Act.

As per the document, for removing inconsistency in regulations, it is proposed to amend Section 194-IA of the Act in case of transfer of immovable property, TDS of 1% will be deducted from the amount paid or credited to the resident or the stamp duty value of the property.

In case of consideration paid for the transfer of immovable property and the stamp duty value of the property is under Rs 50 lakh, then no tax will be deducted under Section 194-IA of the Act.

Image Source

Also read: Government to modify TDS norms on immovable property sale

1% of Tax Deduction at Source (TDS) will be applied on non-agriculture immovable properties over Rs 50 lakh based on the sale price or the stamp duty after an amendment in the Income Tax Act. Currently, the TDS is deducted based on the consideration value of the immovable properties. There is no consistency in the Income Tax Act regarding the levy of the TDS. Nirmala Sitharaman, Minister of Finance, has proposed the amendment to do in the anomaly in the law. According to the Finance Bill 2022 and the Budget, the government proposes to amend Section 194-IA of the Income Tax Act to remove inconsistency with Section 43CA and 50CA of the law. According to the Finance Bill, Section 194-IA of the Act provides a tax deduction on the payment on transfer of some immovable properties apart from agricultural land. Sub-section I provide for deduction of tax by any person responsible for paying a resident any amount of consideration for transfer of any immovable property during the time of credit or payment of the amount to the resident at 1% of amount as the income tax. Sub-section 2 provided no deduction of tax where the consideration of the transfer of any immovable property is under Rs 50 lakh. According to the document, TDS has to be deducted from the amount of consideration paid by the transferee to the transferor. The section does not count the stamp duty value of the immovable property, while Sections 43CA and 50C of the Act, for the computation of income under profit and gains from business and capital gains, respectively, the stamp duty value is also to be considered. The Ministry highlighted the inconsistency in the provisions of Section 194-IA and Section 43CA and 50C of the Act. As per the document, for removing inconsistency in regulations, it is proposed to amend Section 194-IA of the Act in case of transfer of immovable property, TDS of 1% will be deducted from the amount paid or credited to the resident or the stamp duty value of the property. In case of consideration paid for the transfer of immovable property and the stamp duty value of the property is under Rs 50 lakh, then no tax will be deducted under Section 194-IA of the Act. Image Source Also read: Government to modify TDS norms on immovable property sale

Next Story
Resources

Ajmera Realty launches tree drive on Environment Day

Ajmera Realty & Infra India marked World Environment Day with a large-scale tree plantation initiative—Plant-with-Purpose—across its projects in Mumbai and Bangalore. The drive was inaugurated at Ajmera Manhattan and Ajmera Greenfinity in Wadala, with senior company officials and residents in attendance. The campaign encourages residents to embrace eco-conscious, self-reliant lifestyles by growing useful plants and trees within their communities. Horticulture expert Devendra Bhekar guided residents on creating and maintaining green spaces. Ajmera Realty planted over 500 trees..

Next Story
Resources

Twaron®-reinforced tyre powers Brunel’s solar race car

Teijin Aramid’s Twaron® with circular content will debut in Bridgestone’s race tyres for the 2025 Bridgestone World Solar Challenge, supporting the Brunel Solar Team’s Nuna 13 car. This marks the first use of the recycled-content aramid in a high-performance race tyre. The Twaron®-reinforced belts help enhance durability, reduce rolling resistance, and maintain lightweight strength—critical for the 3,000-km solar race across Australia. Bridgestone combines this with ENLITENTM tech and other recycled inputs to maximise environmental and performance outcomes. Teijin Aramid, a..

Next Story
Building Material

Kamdhenu Paints launches new wood coating range

Kamdhenu Paints has launched a comprehensive premium wood coating range designed for both interior and exterior applications. The collection includes high-performance solutions like Kamwood 2K PU for a rich matt or high-gloss finish, Kamwood 1K PU for clarity and stain protection, and the Kamwood Melamyne system for a smooth, durable finish. Also featured are Kamwood Wood Stains, which enhance wood grains with vibrant colour, and NC Sanding Sealer for high-build grain filling. The range is supported by Kamwood Thinners for ease of application and optimal finish. Saurabh Agarwal, MD, ..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?