TDS ON PURCHASE OF IMMOVABLE PROPERTY
[SEC 194-IA OF INCOME TAX ACT, 1961]
1. Section 194-IA has been inserted w.e.f June 1, 2013
Who is responsible for tax deduction	Any person (being a transfree)
	responsible for paying			to a resident
	transferor any sum by way of
	consideration for transfer of any
	immovable	property		(other than
	agricultural land in rural area in
	India), is liable to deduct tax at
	source u/s 194-IA
Time of Deduction	Tax shall be deducted at the time of
	payment (in cash or by issue of a
	cheque or draft or by any other
	mode) or at the time of giving credit
	to the transferor (in the books of
	accounts	of	the	transfree),
	whichever is earlier
Rate of Tax Deduction	Tax is deductible @ 1%. If, however,
	receipient does not furnish his PAN
	to the deductor, tax will be
	deducted (by virtue of Section
	206AA) @ 20%
Thresehold Limit	No Tax is deductible where the
	consideration paid or payable for the
	transfer of an immovable property is
	less than Rs. 50 Lakhs
From the above provision, it is clear that every transfree shall deduct TDS @ 1% where the consideration paid or payable for the transfer of an immovable property is Rs. 50 Lakhs or More.
The applicability of above provision can be understood by the below examples:
Example 1.Mr. A purchases 1000 sq.fts space for a total consideration of Rs. 2 crores. The building is currently under construction and likely to be completed in 2015. Amount is payable in instalments (out of the total 10 installments, 6installments have already been paid before June 1, 2013).