Section 194-IA(1)

Section 194-IA(1) — the law in short

What the courts have decided on section 194-IA(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Sachin Kumar Kabra v. ITO (TDS), Bhilwara (ITAT Jodhpur) — two brothers each paying under fifty lakh for a Rs 65.11 lakh plot owed no section 194-IA deduction ITATHelps taxpayerSuperseded by amendment
  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?
  For a purchase before 1 October 2024 the assessee was right and the Commissioner (Appeals) was wrong. The Tribunal, following its own Coordinate Bench in Dalpat Singh Nanecha, held that the case was fully covered and directed the Assessing Officer to delete the entire demand raised under section 201(1) and section 201(1A) for non-deduction under section 194-IA.
• Shamim Irshad v. ITO, Ward-77(2), New Delhi (ITAT Delhi) — before 1 October 2024 the section 194-IA obligation was qua each transferee, not qua the aggregate consideration ITATHelps taxpayerSuperseded by amendment
  I bought a flat jointly with my husband for Rs 55 lakh in 2015 and I paid Rs 40 lakh of it. The TDS officer has made me an assessee in default under section 194-IA because the property crossed fifty lakh. Was I obliged to deduct?
  For a purchase before 1 October 2024, no. The Tribunal held that the obligation cast by section 194-IA is qua each transferee and not qua the aggregate consideration, so where the transferee in question neither credited nor paid more than fifty lakh rupees the section has no application and no default under section 201(1) or 201(1A) arises.
• 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 CBDT Circulars & InstructionsCuts both ways
  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.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.