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

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

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.

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.

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?