Tax on buying land!

If I buy any land/building then is there any requirement to deduct tax from the sale proceeds to be paid by me to the seller?


Yes you would need to deduct tax @ 1% if he is a resident seller and 20% + surcharge + cess if he is a Non resident. If there are join sellers , this would need to be done proportionately


Yes, Finance Act, 2013 has introduced section 194-IA which provides for deduction of tax at source in case of payment of sale consideration of immovable property (other than rural agricultural land) to a resident. S​ection 194-IA is not applicable if the seller is a non-resident. Tax is to be deducted @ 1%. No tax is to be deducted if the consideration is below Rs. 50,00,000. If the sale consideration exceeds Rs. 50,00,000, then tax is to be deducted on the entire amount and not only on the amount exceeding Rs. 50,00,000.


If the seller is a non-resident then tax is be deducted under section 195 and not under section 194-IA. Thus, in case of purchase of property from non-resident TDS provisions of section 195​ will apply and not of section 194-IA


Tds u/s 195 and Tds return u/s 27Q.

Best Regards

Ruchika Bhagat
Founder Principal

Brooks Logo_modfied (2)

Payroll Management Specialists, Since 1999

New Delhi Office

F-13, St. Soldier Tower, G-Block, PVR Commercial Complex, Vikas Puri, New Delhi -110018, India
T : + 91 11 4856 0000 Extn. 200 F : + 91 11 43850030 M : + 91 98101 58561

E : | W:

New Delhi | Gurgaon | Mumbai

Certificate of Appreciation from World Bank - Doing Business 2013: Smarter Regulations for small & medium - size enterprises

Certificate of Appreciation from World Bank - Doing Business 2014- Understanding regulations for small & medium - size enterprises

Brooks Consulting Private limited is registered company in India (Company Registration number U74120DL2007PTC165802)

Disclaimer: The information in this email is confidential and may be legally privileged. It is intended solely for the addressee and others authorized to receive it. If you are not the intended recipient, any disclosure, copying, distribution or action taken in reliance on its contents is prohibited and may be unlawful.
P Please do not print this email unless it is absolutely necessary. Let’s spread environmental awareness.