At the time of buying property, 1% Tax deduction at source (TDS) will apply on a non-agriculture immovable property of more than Rs 50 lakh based on the sale price or the stamp duty value, whichever is higher, after a modification in the Income Tax Act. Presently, the TDS is deducted on a basis, only on the consideration value of the immobile properties.There is an inconsistency in the Income Tax Act about the levy of Tax Deduction at Source (TDS). On Tuesday, Finance Minister Nirmala Sitharaman proposed the amendment to do away with the anomaly in the law. According to the Finance Bill, 2022, introduced in Parliament along with the other Budget documents, the government offers to amend Section 194-IA of the Income Tax Act, to remove inconsistency with Section 43CA and 50CA of the law. This modification, if done, will take effect from April 1, 2022. Describing the rationale behind the amendment, the Finance Bill said Section 194-IA of the Act renders for deduction of tax on payment on transfer of certain immovable property other than agricultural land. The sub-section (1) provides for deduction of tax by any person responsible for paying to a resident any sum by way of consideration for transfer of any immovable property (other than agricultural land) at the time of credit or payment of such sum to the resident at the rate of 1% of such sum as income-tax thereon. Sub-section (2) renders that no tax deduction should be made where the consideration for the transfer of immovable property is lower than Rs 50 lakh. According to the requirements, TDS is to be deducted on the amount of consideration paid by the transferee to the transferor, the document said.This section does not consider the stamp duty price of the immovable property, whereas, as the conditions of section per 43CA and 50C of the Act, for the estimation of income under the head 'profits and gains from business or profession' and 'capital gains' respectively, the stamp duty value is also to be viewed. Therefore, there is inconsistency in the rules of section 194-IA and sections 43CA and 50C of the Act. To remove inconsistency, it is offered to amend section 194-IA of the Act to render that in case of transfer of an immovable property (other than agricultural land), TDS is to be deducted at the rate of 1% of such sum paid or credited to the resident or the stamp duty value of such property, whichever is higher. Image Source Also read: CREDAI asks for several tax sops to increase housing demand