TDS on Purchase of Immovable Property: Section 393(1) of new Income Tax, 2025

The primary provision governing the deduction of tax at source on the purchase of land (immovable property) is contained in Section 393 of the Income Tax Act, 2025. This section corresponds to the provisions of Section 194-IA of the erstwhile Income-tax Act, 1961.

The detailed provisions as per the provided documents are as follows:

• Governing Section: The liability to deduct tax is specified under Serial Number 3(i) of the table in Section 393(1) of the Income Tax Act, 2025 .
• Payer/Deductor: Any person who is a transferee (buyer) is responsible for deducting the tax. This applies to all persons other than those required to deduct tax under serial number 3(iii) (related to compulsory acquisition).
• Payee/Deductee: The tax is to be deducted from the payment made to a resident transferor (seller).
• Nature of Transaction: The provision applies to any sum paid as consideration for the transfer of any immovable property .
• Rate of TDS: The tax must be deducted at the rate of 1% .
• Value for TDS Calculation: The 1% tax is to be calculated on the higher of the following two amounts:

1. The consideration paid for the transfer of the immovable property; or
2. The stamp duty value (SDV) of such property .

Threshold Limit: The requirement to deduct tax under this provision is triggered only if the consideration or the stamp duty value for the transfer of the immovable property is ₹50,00,000 (fifty lakh rupees) or more. No tax is required to be deducted if the value is less than this threshold . As clarified by the Finance Act, 2026, this threshold is unequivocally applicable to voluntary sales . Timing of Deduction: The tax must be deducted at the time of credit of the sum to the account of the payee or at the time of payment, whichever is earlier . TAN Requirement: A significant compliance relief is that the deductor (buyer) is not required to obtain a Tax Deduction and Collection Account Number (TAN) for this purpose .

Exception: Agricultural Land

A crucial exclusion from this TDS provision is 'agricultural land'. The law explicitly states that the provision applies to the transfer of immovable property "other than agricultural land"