# TDS on Transfer of Immovable Property - Section 194-IA

## Trigger Rule

When a transferor (resident) sells immovable property (other than agricultural land) to a transferee, the transferee must deduct tax at source.

## Threshold

TDS applies if consideration OR stamp duty value (whichever is higher) is ₹50,00,000 or more.

## Rate

1% of the higher of:

Consideration for transfer, OR
Stamp duty value of the property

## Multiple Transferees / Transferors

Where there are multiple buyers or multiple sellers for the same property, the consideration is the aggregate of amounts paid/payable by all transferees to all transferors. The threshold and TDS apply on this aggregate amount.

## No TAN Required

The transferee need not obtain TAN — payment through Form 26QB using PAN.

## Exclusion

Does NOT apply to:

Agricultural land (rural)
Transactions where seller is non-resident (then section 195 applies)

Worked example

### Example 1

Example: Ms. Shashi and Ms. Sujata jointly purchase a property from Mr. Z. Consideration: ₹60 lakhs. Stamp duty value: ₹75 lakhs.

Solution:

Higher of consideration (₹60L) and SDV (₹75L) = ₹75 lakhs.
This crosses the ₹50 lakh threshold.
TDS = ₹75,00,000 × 1% = ₹75,000 (to be deducted in aggregate by both purchasers).

⚠️ Common exam mistakes

Deducting TDS only on consideration when SDV is higher — must use higher value.
Splitting the property purchase between co-buyers to artificially keep each share below ₹50 lakhs — the aggregate test applies.
Applying 194-IA on sale of rural agricultural land — excluded from definition.

Bare-Act text 194-IA · Income-tax Act, 1961 · click to expand

As per section 194-IA, if a person (transferor) transfers any immovable property whose consideration for transfer or stamp duty value is not less than ₹50 lakh to a person (transferee), then transferee is required to deduct tax at source @1% of consideration for transfer or stamp duty value, whichever is higher. In case there are multiple transferee or transferor in respect of any immovable property, consideration shall be the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors for transfer of such immovable property.

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Section 194-IA - TDS on Transfer of Immovable Property

Worked example

⚠️ Common exam mistakes