Property buyers to pay 1percent TDS for purchase above 50 Lac: Buying property worth over Rs 50 lakh? Then pay TDS before registering it, or sleuths will come knocking on your door.

The TDS (Tax Deducted at Source) kicks in from June 1 with the implementation of Section 194-IA, announced in the finance budget of 2013-14. As per this section, the buyer should provide TDS documents on transfer or sale of immovable property (mainly land or house) other than agricultural land, before registering the property. The sub-registrars act as check-posts, if such transactions take place and TDS documents are not provided. This is applicable only if the transaction is Rs 50 lakh or above.

This was made clear at a workshop organized by the IT department and the stamps and registration department, to educate sub-registrars on TDS provision on the sale of immovable property, on Tuesday.

Of the total transaction, 1% is TDS and 1% is levied as stamp duty, but in case the seller doesn’t provide PAN documents or gives an invalid PAN, the buyer should deduct 20% tax instead of 1%.

S Ravi, director-general of income tax (investment), said: “Sub-registrars ensure that PAN numbers and the permanent address of the seller should be available because many a time, in case of tax evasion and property sale, the original land owner is untraceable by the department. This should be done if the land is sold via a joint development agreement. PAN should be mentioned in all transactions, applicable under this section. Sub-registrars have been sending us a lot of information of TDS collection and cases of evasion too, but now there’s a format which should be adhered to. This format makes it easy for IT sleuths to track cases.”

Inspector-general of registration and commissioner of stamps AS Saleem said: “Out of the Rs 5,260 crore revenue the stamps and registration department collected last fiscal, 60-70% was collected from Bangalore Urban alone. Another Rs 500 crore comes from optional registerable documents like shares and loan bonds. We’re also trying to levy stamp duty on imported goods.”


Section 194-IA of Income Tax Act — payment on transfer of certain immovable property other than agricultural land states: Any person, being a transferee, responsible for paying 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 of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to 1%of such sum as income-tax.


Who should pay TDS: buyer of the property

When it should be paid: before registering the property

Sub-registrars must note the permanent address and PAN of seller


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  • Puneet Khurana says:

    I have purchased a property worth Rs 68 lakhs in 2012.
    95% of the payment was done in 2012.
    Of the remaining 5% of BSP+PLC amounting to Rs 3.8 lakhs was paid along with other payments totalling Rs 10 lakhs recently without deductions of TDS till date.
    Do I need to make payment of TDS on 68 lakhs or on 10 lakhs or on Rs 3.8 lakhs or shall I ask the seller to make payment on my behalf or refund the amount to me.
    Awaiting your response asap.

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  • D.Ramaswamy says:

    When to deduct TDS, is it one day before paying full amt to the seller or on the same day? I am going to buy a property in Chennai in next 6 days. Your expert advice will be much helpful.

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  • Karan Batra says:

    Would TDS also be deducted on the Parking Charges, Maintanence Charges and several other charges as well which are paid at the time of purchase of property?

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