- Section 194-IA of the Income Tax Act, 1961 primarily provides for deduction of tax at the rate of 1% of consideration paid to a resident for acquisition of an immovable property.
- The said provision is presently applicable only in case where the consideration paid or Stamp duty value of the property is equal to or more than ₹ 50 lakhs. It is pertinent to note here that in case of more than one buyer or seller the aforesaid limit of ₹ 50 lakh was calculated for each buyer and seller individually irrespective of the fact that the gross value of the property is more than ₹ 50 lakhs.
- The Finance Bill, 2024 proposes to bring amendment to the aforesaid section. The said amendment introduces a new proviso in the said section as a result of which the liability to deduct tax at the rate of 1% will become applicable in case the consideration paid or SDV of the property is more than ₹ 50 lakhs even if the individual consideration paid by one buyer or one seller is less than the said threshold limit.
- In other words with effect from 01.10.2024 it is proposed that the aforesaid limit of ₹ 50 lakhs for application of the provisions with respect to TDS u/s 194 IA will be for the entire property and not in accordance with the consideration being paid by one or more co-buyer as the case may be.