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The tax rule to know when you partner with relative to buy property

Sale transactions of less than Rs 50 lakh is not subject to tax deducted at source

Bindisha Sarang Mumbai

Premium

Authorities have clarified when TDS under Section 194IA is applicable. (File photo)

7 min read Last Updated : Apr 28 2023 | 7:17 PM IST

The Jodhpur bench of the Income Tax Appellate Tribunal (ITAT) recently ruled that tax deducted at source (TDS) under Section 194IA is applicable only when consideration for the transfer of immovable property is more than Rs 50 lakh.

To negate the use of black money in immovable property transactions, the government introduced Section 194IA via the Finance Act 2013.

"Section 194IA mandates that, where any resident transfers any immovable property, (other than agricultural land), whose sale consideration or stamp duty value (SDV) of the immovable property, whichever is higher, is Rs 50 lakh or more, then the transferee is required to withhold tax at the rate of 1 per cent of such consideration or SDV of the immovable property, whichever is higher," says Keshav Singhania, leader, private client, Singhania & Co. LLP.

"The term 'consideration' includes the price paid or pa