1. Section has been inserted w.e.f. 01.06.2013.

2. Deductor & Deductee: Any person (being a transferee) responsible for paying (other than person referred to in section 194LA) to a Resident transferor any sum by way of consideration for transfer of any immovable property (other agricultural land in rural area in India), is liable to deduct the TDS under this section.

3. Time of deduction: At the time of payment or credit to the transferor in the books of transferee, whichever is earlier.

4. Rate of TDS:-

a. In case of PAN of Deductee is available-1%

b. In case of NO PAN of Deductee is available-20%

5. Limit: No TDS is to be deducted when consideration is less than Rs 50, 00,000.

6. Provision of TAN not applicable.

7. Immovable property means any land or building or part of building. Such may be situated in India or may be situated out of India.



1. Under the registry of property purchased, we have to mention the consideration paid along with required TDS deducted.

2. In case property is financed by the any financial institution or banks :

a. 100% financed by the bank: Although it is not practically possible that any bank can finance the property 100% yet purchaser has to give standing instructions to the financing bank or institution for deducting the TDS out of the total consideration paid or to be paid, as the case may be & depositing the same.

b. In case or promoter contribution case i.e. less than 100% finance by the bank:

In such cases, purchase can deduct the TDS out of the total sum to be financed by the himself & can deposited in to bank & Rest portion will be financed by the bank.

3. In case of instalment system of payment is followed , TDS is required to be deducted on all such instalments individually which fall due after 01.06.2013 & whose cumulative amount is more than 50lacs.but only on principal portion ,not on the interest portion or penalty portion (if any).

4. Threshold limit of Rs 50 lacs will be applicable to each & every property separately.

5. Property can be of residential or official purpose.

6. Transferor can be dealer, user of the property or salaried class employee.

7. TDS under section 194IA is to be deposited on CHALLAN cum Statement on Form 26QB.

8. Online Payment of TDS is mandatory. Online payment CHALLAN is available in TIN NSDL Website.

9. TDS certificate must be issued to deductee (buyer) in Form 16B within 15 days from due date of deposit.

(The author, Parthik Dikshit , is a Chartered Accountant. He can be reached at – parthik.dikshit@gmail.com)


1.CPC(TDS) releases Online Correction Facility for 26QB Statements

Mandatory Filing of Form 26QB by Buyer of Immovable Property


CPC-TDS enables online correction in form 26QB


Withholding tax Impact on Property transaction by Non-Residents Indian/Foreign Nationals


TDS on sale of Immovable Property- Beware CPC TDS issuing intimation for late deposit of TDS


TDS on sale of Immovable Property by Non-resident


TDS- Sec.194IA – Payment on transfer of certain immovable property


Transfer of Immovable Property & Income Tax – A Critical Analysis


Procedure for TDS Payment (FORM 26QB) and Generation of Form 16B


Tds On Purchase Of Immovable Property Effective 1st June,2013

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Category : Income Tax (20866)
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Tags : Section 194IA (36) TDS (786)
  • Anuj Dua DNA Realtors

    I need clarification on following
    is it applicable on total cost of property i.e BSP+Club membership+power back up+PLC+FPC & Car parking plus service tax or just on Basic amount

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