Four of us bought one flat and each of us paid under fifty lakh rupees. The TDS officer says we should have deducted under section 194-IA. Did we have to, and does the answer depend on when we bought?
It depends entirely on the date. From 1 October 2024 sub-section (2) carries a proviso which says that where there is more than one transferor or transferee in respect of any immovable property, the consideration is the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors — so a flat bought by four buyers for Rs 80 lakh is inside section 194-IA even though each buyer pays Rs 20 lakh. For a transfer before that date there is no such aggregation rule in the section, and the Tribunal has repeatedly read the obligation as arising qua each transferee.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2024-10-01, reported as Income-tax Act, 1961, s.194-IA, as it stands after the proviso to sub-section (2) inserted with effect from 1 October 2024. It bears on section 194-IA, section 194-IA(1), section 194-IA(2), section 194-IA(3), section 194LA, section 203A, section 206AA, section 2(14), section 56(2)(vii) of the Income Tax Act 1961, in TDS Defaults, How Tax Law Is Read and Capital Gains matters.
This is the single provision that turns an ordinary flat buyer into a tax deductor, and until 1 October 2024 the statute had a hole in it that families used routinely, sometimes deliberately: split the purchase between spouses or siblings, keep every share under fifty lakh rupees, deduct nothing. The proviso closes the hole prospectively. Two other changes matter just as much and are missed more often. First, from 1 April 2022 the one per cent is charged not on the consideration alone but on 'such sum or the stamp duty value of such property, whichever is higher', and sub-section (2) exempts only where the consideration and the stamp duty value are BOTH less than fifty lakh rupees — so a flat bought for Rs 48 lakh with a circle rate of Rs 62 lakh is inside the section and the deduction is computed on Rs 62 lakh. Second, Explanation (aa), which came in on the same date, drags club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee and any other charges of a similar nature incidental to the transfer into the 'consideration', which pushes many deals over the threshold that the bare sale price does not. Two limits on the section survive all of this: it does not reach agricultural land as defined in Explanation (a), and sub-section (1) excludes 'the person referred to in section 194LA' — so a compulsory-acquisition payer deducts under section 194LA and not under this section.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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As printed on the Year 2026 and Year 2025 departmental pages, section 194-IA reads: (1) 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 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 one per cent of such sum or the stamp duty value of such property, whichever is higher, as income-tax thereon. (2) No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property and the stamp duty value of such property, are both, less than fifty lakh rupees: Provided that where there is more than one transferor or transferee in respect of any immovable property, then the 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. (3) The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section. The Explanation defines 'agricultural land' as agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2; 'consideration for transfer of any immovable property' as including all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property; 'immovable property' as any land (other than agricultural land) or any building or part of a building; and 'stamp duty value' as having the same meaning as assigned to it in clause (f) of the Explanation to clause (vii) of sub-section (2) of section 56.
As the section stands from 1 October 2024: the rate is one per cent, charged on the higher of the consideration and the stamp duty value; the fifty lakh rupee threshold in sub-section (2) is crossed unless BOTH the consideration and the stamp duty value are below it; and where there is more than one transferor or transferee the consideration for that purpose is the aggregate of what all the transferees pay or are to pay to the transferor or to all the transferors. Before 1 October 2024 the section contained no aggregation rule. Before 1 April 2022 the charge was on the consideration alone and sub-section (2) spoke only of the consideration, and there was no Explanation (aa) or (c). Section 203A does not apply to a deductor under this section, and a payer covered by section 194LA is outside it.
Not applicable — this is a statement of statutory text and of the amendment footnotes printed on the same departmental pages. No judicial reasoning is involved.
Provided that where there is more than one transferor or transferee in respect of any immovable property, then the 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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Handle my notice → Ask a CA on WhatsAppIt depends entirely on the date. From 1 October 2024 sub-section (2) carries a proviso which says that where there is more than one transferor or transferee in respect of any immovable property, the consideration is the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors — so a flat bought by four buyers for Rs 80 lakh is inside section 194-IA even though each buyer pays Rs 20 lakh. For a transfer before that date there is no such aggregation rule in the section, and the Tribunal has repeatedly read the obligation as arising qua each transferee. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 194-IA, section 194-IA(1), section 194-IA(2), section 194-IA(3), section 194LA, section 203A, section 206AA, section 2(14), section 56(2)(vii) of the Income Tax Act 1961. It is reported as Income-tax Act, 1961, s.194-IA, as it stands after the proviso to sub-section (2) inserted with effect from 1 October 2024. This is the single provision that turns an ordinary flat buyer into a tax deductor, and until 1 October 2024 the statute had a hole in it that families used routinely, sometimes deliberately: split the purchase between spouses or siblings, keep every share under fifty lakh rupees, deduct nothing. The proviso closes the hole prospectively. Two other changes matter just as much and are missed more often. First, from 1 April 2022 the one per cent is charged not on the consideration alone but on 'such sum or the stamp duty value of such property, whichever is higher', and sub-section (2) exempts only where the consideration and the stamp duty value are BOTH less than fifty lakh rupees — so a flat bought for Rs 48 lakh with a circle rate of Rs 62 lakh is inside the section and the deduction is computed on Rs 62 lakh. Second, Explanation (aa), which came in on the same date, drags club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee and any other charges of a similar nature incidental to the transfer into the 'consideration', which pushes many deals over the threshold that the bare sale price does not. Two limits on the section survive all of this: it does not reach agricultural land as defined in Explanation (a), and sub-section (1) excludes 'the person referred to in section 194LA' — so a compulsory-acquisition payer deducts under section 194LA and not under this section. If it applies to you, the first step is this: Fix the date of credit or payment first, because that is what decides which text applies. For a credit or payment on or after 1 October 2024 apply the aggregation proviso; for an earlier one, do not.
As printed on the Year 2026 and Year 2025 departmental pages, section 194-IA reads: (1) 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 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 one per cent of such sum or the stamp duty value of such property, whichever is higher, as income-tax thereon. (2) No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property and the stamp duty value of such property, are both, less than fifty lakh rupees: Provided that where there is more than one transferor or transferee in respect of any immovable property, then the 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. (3) The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section. The Explanation defines 'agricultural land' as agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2; 'consideration for transfer of any immovable property' as including all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property; 'immovable property' as any land (other than agricultural land) or any building or part of a building; and 'stamp duty value' as having the same meaning as assigned to it in clause (f) of the Explanation to clause (vii) of sub-section (2) of section 56. The matter was decided on 2024-10-01 by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. As the section stands from 1 October 2024: the rate is one per cent, charged on the higher of the consideration and the stamp duty value; the fifty lakh rupee threshold in sub-section (2) is crossed unless BOTH the consideration and the stamp duty value are below it; and where there is more than one transferor or transferee the consideration for that purpose is the aggregate of what all the transferees pay or are to pay to the transferor or to all the transferors. Before 1 October 2024 the section contained no aggregation rule. Before 1 April 2022 the charge was on the consideration alone and sub-section (2) spoke only of the consideration, and there was no Explanation (aa) or (c). Section 203A does not apply to a deductor under this section, and a payer covered by section 194LA is outside it.
Not applicable — this is a statement of statutory text and of the amendment footnotes printed on the same departmental pages. No judicial reasoning is involved. In the words reproduced by the source cited on this page: "Provided that where there is more than one transferor or transferee in respect of any immovable property, then the 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."
It was decided by the CBDT Circulars & Instructions on 2024-10-01 and is reported as Income-tax Act, 1961, s.194-IA, as it stands after the proviso to sub-section (2) inserted with effect from 1 October 2024. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 194-IA, section 194-IA(1), section 194-IA(2), section 194-IA(3), section 194LA, section 203A, section 206AA, section 2(14), section 56(2)(vii), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. As the section stands from 1 October 2024: the rate is one per cent, charged on the higher of the consideration and the stamp duty value; the fifty lakh rupee threshold in sub-section (2) is crossed unless BOTH the consideration and the stamp duty value are below it; and where there is more than one transferor or transferee the consideration for that purpose is the aggregate of what all the transferees pay or are to pay to the transferor or to all the transferors. Before 1 October 2024 the section contained no aggregation rule. Before 1 April 2022 the charge was on the consideration alone and sub-section (2) spoke only of the consideration, and there was no Explanation (aa) or (c). Section 203A does not apply to a deductor under this section, and a payer covered by section 194LA is outside it. It arises in TDS Defaults, How Tax Law Is Read and Capital Gains matters, on section 194-IA, section 194-IA(1), section 194-IA(2), section 194-IA(3), section 194LA, section 203A, section 206AA, section 2(14), section 56(2)(vii) of the Income Tax Act 1961, and was decided by Not applicable — statutory text. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. For a pre-1 October 2024 transfer where each buyer paid under fifty lakh rupees, take the point that the obligation is qua each transferee and cite Shamim Irshad v. ITO (ITAT Delhi, 2 August 2022) and Sachin Kumar Kabra v. ITO (TDS) (ITAT Jodhpur, 23 January 2024). Do not cite that line for a later transfer. Obtain the stamp duty valuation used at registration and compare it with the consideration. From 1 April 2022 you deduct on the higher of the two, and you are outside sub-section (2) only if both are under fifty lakh rupees. Add every incidental charge caught by Explanation (aa) — club membership, car parking, electricity and water facility, maintenance, advance fee — before you decide the threshold is not crossed. If the land is agricultural, establish that first and separately, on the Explanation (a) definition read with section 2(14)(iii): that defeats the section entirely and takes section 206AA with it. Do not apply for a TAN. Sub-section (3) disapplies section 203A, and the deduction is reported on the challan-cum-statement in Form 26QB, with Form 16B issued to the seller (the departmental page's own note is 'See rules 30, 31, 31A and 37BA and Form Nos. 16B, 26B, 26QB and 27A'). Where the seller has no PAN, price the risk under section 206AA before completion — the rate goes to twenty per cent, and that is where the large section 201 demands in this area come from.
Still good law. Two consolidations of the current text print identical words, which is the strongest evidence available here that nothing has displaced the 1 October 2024 position. That is not the same as reading the current Finance Act: no Finance Act text is set out here, and the amending Act is recorded only by its number, Act No. 15 of 2024, as the footnotes to the section give it. Any authority, opinion or software setting stating that the fifty lakh rupee threshold applies to each buyer's own share is superseded by amendment for a credit or payment on or after 1 October 2024, and any statement that the base is the consideration alone is superseded for a credit or payment on or after 1 April 2022. The date that governs in each case is the earlier of the event of credit or payment, not the date of the agreement or of registration. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Every word of the current text and every amendment date above comes from the Act itself, under the heading 'Payment on transfer of certain immovable property other than agricultural land'. Two consolidations agree word for word. The multiple-transferor/transferee proviso carries the footnote 'Ins. by Act No. 15 of 2024, w.e.f. 1-10-2024', printed in one consolidation as 'Inserted by the Act No. 15 of 2024, w.e.f. 1-10-2024'. An earlier consolidation of the same section prints sub-section (2) WITHOUT the proviso, which independently confirms that the proviso arrived during 2024 and not earlier. The stamp duty value amendments are footnoted as 'Inserted by the Act No. 6 of 2022, w.e.f. 1-4-2022', 'Substituted for "immovable property is" by the Act No. 6 of 2022, w.e.f. 1-4-2022' and 'Inserted by the Act No. 6 of 2022, w.e.f. 1-4-2022'; an earlier one gives the same three changes by name as 'the Finance Act, 2022, w.e.f. 1-4-2022'. Those two together are what pins Act No. 6 of 2022 to the Finance Act, 2022. That Act No. 15 of 2024 is the Finance (No. 2) Act, 2024 is NOT independently verified here, and the Act number is stated deliberately rather than a popular name: 1 October 2024 and 1 April 2025 are both live commencement dates here, and a loose label is how the date gets lost. Note that a Commissioner (Appeals) order reproduced in ITO (TDS-3) v. Tarun Santramdas Varma (ITAT Ahmedabad, 26 March 2026) calls the amending statute 'the Finance Act 2024' and 'Finance Bill 2024' while giving the same 1 October 2024 date — a loose label attached to a correct date. Legislative history, used as history and not to state current law: the original section charged one per cent on 'such sum' alone, had a bare 'less than fifty lakh rupees' in sub-section (2), and carried no Explanation (aa) or (c); its insertion is footnoted 'Inserted by the Finance Act, 2013, w.e.f. 1-6-2013'; and the text as it stood in 2021 has Explanation (aa) but still no stamp duty value. Two corrections and one limit. The section 194LA carve-out sits in the opening words of sub-section (1) — 'other than the person referred to in section 194LA' — not in sub-section (3); sub-section (3) disapplies section 203A. The text of rules 30, 31 and 31A is not set out here, so the Form 26QB and Form 16B references above rest only on the 'See rules ... and Form Nos. ...' note printed with the section, and the mechanics of the challan-cum-statement are not stated from the rule. And decided_on, 1 October 2024, is the COMMENCEMENT DATE of the proviso to sub-section (2), not a decision date; this is a statutory entry and it asserts no bench and no holding. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
As the section stands from 1 October 2024: the rate is one per cent, charged on the higher of the consideration and the stamp duty value; the fifty lakh rupee threshold in sub-section (2) is crossed unless BOTH the consideration and the stamp duty value are below it; and where there is more than one transferor or transferee the consideration for that purpose is the aggregate of what all the transferees pay or are to pay to the transferor or to all the transferors. Before 1 October 2024 the section contained no aggregation rule. Before 1 April 2022 the charge was on the consideration alone and sub-section (2) spoke only of the consideration, and there was no Explanation (aa) or (c). Section 203A does not apply to a deductor under this section, and a payer covered by section 194LA is outside it.
TaxSphere, “Statutory position — s.194-IA: the fifty lakh threshold, the multiple-transferor/transferee proviso from 1 October 2024, and the stamp duty value base from 1 April 2022”, https://taxnotice.vittsphere.com/caselaw/case/statutory-position-194-ia-fifty-lakh-threshold-multiple-transferees-and-stamp-duty-value/ (validity last checked 2026-09-08)
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My brother and I bought a plot from the development authority for Rs 65.11 lakh and paid half each. The Commissioner (Appeals) says the threshold is per property, so we should have deducted. Who is right?
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Four of us bought jointly, each share under Rs 50 lakh — is 194-IA TDS due after the 2024 change?
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