TDS applicability on transfer of tenancy rights

[Aliasgar Tambawala]

As per S/194 IA TDS @ 1% is to be deducted in respect of payment on transfer of certain immovable property other than Agricultural Land. Does immoveable property include 'Transfer of tenancy right' i.e. If the Incoming Tenant enters into transfer of tenancy and pays compensation to the Outgoing Tenant exceeding ₹ 50 lakh - Will TDS be applicalble as per S/194 IA of the Income tax Act, 1961?

AI Summary

Does TDS under Section 194-IA apply to tenancy rights transfers over 50 lakh? Clarification sought. A query was raised regarding the applicability of Tax Deducted at Source (TDS) under Section 194-IA of the Income Tax Act, 1961, on the transfer of tenancy rights. Specifically, the question is whether TDS at 1% should be deducted when an incoming tenant pays compensation exceeding 50 lakh to an outgoing tenant for the transfer of tenancy rights, which is considered a transfer of immovable property other than agricultural land. The discussion seeks clarification on whether such transactions fall under the purview of the mentioned tax provision.