The Statutory Brief

IT Act 1961 → 2025 / Section 194-IA

TDS

Section 194-IA → Section 393

TDS of 1% on purchase of immovable property worth ₹50 lakh or more

Section 194-IA of the old Income-tax Act, 1961 · new section 393 under the Income-tax Act, 2025

New reference Section 393(1), Table Sl. No. 3(i)

Income-tax Act, 1961Section 194-IA

  • Buyer deducts 1% when consideration or stamp duty value is ₹50 lakh or more
  • Rate on the higher of consideration and stamp duty value
  • Agricultural land excluded
  • No TAN needed (Form 26QB)

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 393(1), Table Sl. No. 3(i)

  • Section 393(1), Table Sl. No. 3(i): 1% of consideration or stamp duty value, whichever is higher
  • Threshold ₹50 lakh, computed on the aggregate paid by all buyers to all sellers (Notes 1 and 3)
  • Compensation on compulsory acquisition (old 194LA) is Sl. No. 3(iii)
  • No TAN needed for this deduction (section 397(1)(c))

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Consolidated into section 393; rate and threshold unchanged. The aggregation rule for multiple buyers/sellers is now written into the table notes.

Practice notes

  • Where the seller is a non-resident, TDS is under section 393(2), not 3(i).
  • Joint development agreements (old 194-IC) are Sl. No. 3(ii) at 10%.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the TDS rate on purchase of property under the new Income Tax Act 2025?

1% of the higher of sale consideration and stamp duty value, where either is ₹50 lakh or more — section 393(1), Table Sl. No. 3(i).

What is section 194-IA called in the new Income-tax Act, 2025?

Section 194-IA of the Income-tax Act, 1961 corresponds to Section 393(1), Table Sl. No. 3(i) of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 194-IA under the new Income Tax Act?

Consolidated into section 393; rate and threshold unchanged. The aggregation rule for multiple buyers/sellers is now written into the table notes.

Is section 194-IA still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 194-IA of the 1961 Act. Section 393(1), Table Sl. No. 3(i) of the 2025 Act applies from tax year 2026-27.

Related sections

50C→78Stamp duty value as sale consideration for land or building112→197Tax on long-term capital gains on other assets (property, unlisted shares, gold, etc.)194-I→393TDS on rent paid by businesses (and by individuals/HUFs, old 194-IB)