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

## Who Deducts

Any person being a transferee (other than a person referred to in section 194LA — relating to compulsory acquisition).

## Payee

Resident transferor.

## On What

Consideration for transfer of any immovable property other than agricultural land.

## Threshold

Consideration OR Stamp Duty Value (SDV) ≥ ₹ 50 lakh.

## Rate of TDS

1% of consideration for transfer OR SDV, whichever is higher.

## When to Deduct

At the time of credit OR payment, whichever is earlier.

## Important Points

The deductor (buyer) does NOT need a TAN — uses PAN.
TDS to be deposited via Form 26QB.
If consideration is paid in instalments, TDS is deducted on each instalment.
Rural agricultural land is excluded.

Worked example

### Example 1

Example 1: Mr. A purchases an urban flat from Mr. B for ₹ 80 lakhs. SDV = ₹ 75 lakhs.

Solution: Higher of consideration & SDV = ₹ 80 lakhs.

TDS = 1% × ₹ 80 lakhs = ₹ 80,000.

### Example 2

Example 2: Mr. X purchases land for ₹ 45 lakhs (SDV ₹ 52 lakhs).

Solution: Although consideration < ₹ 50 lakhs, SDV ≥ ₹ 50 lakhs → TDS applies.

TDS = 1% × ₹ 52 lakhs (higher) = ₹ 52,000.

### Example 3

Example 3: Mr. P purchases rural agricultural land for ₹ 1 crore.

Solution: No TDS — rural agricultural land is excluded from 194-IA.

⚠️ Common exam mistakes

Computing TDS on consideration when SDV is higher — must use the higher of the two
Applying 194-IA on rural agricultural land — excluded
Forgetting that threshold tests apply to consideration OR SDV — not just consideration
Buyer obtaining TAN — not required for 194-IA, PAN is used with Form 26QB

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

Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment, whichever is earlier, deduct an amount equal to one per cent of such sum or the stamp duty value of such property, whichever is higher, as income-tax thereon. Provided that no deduction shall be made where consideration and SDV are both less than ₹ 50 lakh.

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →

Section 194-IA - TDS on Transfer of Immovable Property

Worked example

⚠️ Common exam mistakes