1% TDS to be applicable on property worth Rs 5 million or more

24 Jul 2024 CW Team

It was confirmed that 1% TDS will apply to transactions involving multiple sellers or buyers where the total consideration is Rs 5 million or more.

Section 194-IA of the Income Tax Act: This section mandates TDS on the payment of consideration for transferring certain immovable properties other than agricultural land. An amendment will be introduced to clarify this provision. - Finance Minister Nirmala Sitharaman stated, "Where there is more than one transferor or transferee involved in a property transaction, the total consideration for TDS purposes will be the combined amount paid or payable by all transferees to all transferors."

Responsibilities of buyers: - According to the law, the buyer (transferee) must deduct tax at source on the amount paid to the seller (transferor) for transferring the immovable property. - Sub-section (1) of Section 194-IA: Any person responsible for paying a resident for the transfer of any immovable property must deduct 1% TDS on the sum paid or the stamp duty value, whichever is higher. - Sub-section (2) of Section 194-IA: No TDS is required if the consideration and the stamp duty value are both less than Rs 5 million.

Clarification and amendment: - Some taxpayers have interpreted the law to mean that each individual buyer's payment must be less than Rs 50 lakh to avoid TDS, even if the total property value exceeds Rs 5 million. This interpretation contradicts the legislative intent. - The government will amend Sub-section (2) of Section 194-IA to clarify that for properties involving multiple parties, the total consideration is the combined amount paid by all buyers to all sellers.

Effective date: - These amendments will come into effect on October 1, 2024.

The government announced that a 1% Tax Deduction at Source (TDS) will be applicable on the sale of immovable property valued at Rs 5 million or more, even if multiple buyers and sellers are involved. This clarification was provided by Finance Minister Nirmala Sitharaman in her Budget Speech to address cases of misinterpretation of tax provisions. It was confirmed that 1% TDS will apply to transactions involving multiple sellers or buyers where the total consideration is Rs 5 million or more. Section 194-IA of the Income Tax Act: This section mandates TDS on the payment of consideration for transferring certain immovable properties other than agricultural land. An amendment will be introduced to clarify this provision. - Finance Minister Nirmala Sitharaman stated, Where there is more than one transferor or transferee involved in a property transaction, the total consideration for TDS purposes will be the combined amount paid or payable by all transferees to all transferors. Responsibilities of buyers: - According to the law, the buyer (transferee) must deduct tax at source on the amount paid to the seller (transferor) for transferring the immovable property. - Sub-section (1) of Section 194-IA: Any person responsible for paying a resident for the transfer of any immovable property must deduct 1% TDS on the sum paid or the stamp duty value, whichever is higher. - Sub-section (2) of Section 194-IA: No TDS is required if the consideration and the stamp duty value are both less than Rs 5 million. Clarification and amendment: - Some taxpayers have interpreted the law to mean that each individual buyer's payment must be less than Rs 50 lakh to avoid TDS, even if the total property value exceeds Rs 5 million. This interpretation contradicts the legislative intent. - The government will amend Sub-section (2) of Section 194-IA to clarify that for properties involving multiple parties, the total consideration is the combined amount paid by all buyers to all sellers. Effective date: - These amendments will come into effect on October 1, 2024.

Building Material

18 Sep 2025

Ambuja Cements Drags JSW Cement to Court Over ‘Kawach’ Brand

Ambuja Cements, part of the Adani Group, has filed a trademark infringement case against JSW Cement in the Delhi High Court, alleging that its rival copied the ‘Kawach’ brand with its new product ‘Jal Kavach’.Justice Manmeet Pritam Singh Arora issued summons to JSW Cement and its subsidiary, JSW IP Holdings Pvt Ltd, while referring the matter to mediation. Hearings are scheduled to resume on October 15 if no settlement is reached.Ambuja, which registered the ‘Kawach’ trademark in 2019, argues that the term ‘Kavach’—meaning shield—is the distinctive feature of its branding. ..

Technology

18 Sep 2025

Bentley Systems Named Innovation Partner of the Year 2025 by Afcons

Bentley Systems, the infrastructure engineering software company, has been recognised by Afcons Infrastructure Limited as its Innovation Partner of the Year 2025 at the Innovation Partners 2025 Felicitation Ceremony in Mumbai. The award acknowledges Bentley’s contribution to Afcons’ engineering digitalisation journey through an enterprise agreement providing access to over 250 Bentley engineering software tools. This adoption has enabled Afcons to accelerate project delivery, standardise digital workflows, and strengthen innovation across its infrastructure portfolio. Among key i..

Infrastructure Urban

18 Sep 2025

SBI Sells 13.18% Stake in Yes Bank to Japan’s SMBC

State Bank of India (SBI) has completed the sale of a 13.18 per cent stake in Yes Bank to Japan’s Sumitomo Mitsui Banking Corporation (SMBC) for over Rs 8,889 crore. The divestment is part of a Rs 13,482 crore deal finalised in May with SMBC and seven private banks.Following the transaction, SBI’s shareholding in Yes Bank stands at 10.8 per cent. The deal, involving 4,134.4 million shares at Rs 21.50 each, is the largest cross-border transaction in the Indian banking sector.SBI Chairman C S Setty described the 2020 RBI-led rescue of Yes Bank as a pioneering public-private partnership, addi..