TDS payment concern on Land Purchase

[milan bamal]

Dear Team,

We Purchased land of 1.25 Crore

We paid 1st payment on 01-04-2025 -55 Lac

2nd payment on 15-05-2025-55 Lac

3rd payment on 12-06-2025(Final Payment)-13.75 Lac

So we deducted TDS @1% =1.25 lac on 1.25 Cr at the time of final payment and deposited them.

on 25-06-2025

is It correct

or we should have deposited TDS at the time of each payment.

[FCA Adv amit aggarwal]

TDS u/s 194-IA is on higher of:

• actual sale consideration, or
• stamp duty value.

TDS @1% was required to be deducted at the time of each payment/credit, whichever was earlier.

and mandatory to deposit on or before 7th day of next month, otherwise interest will charged by deptt through issuing a notice.

TDS will be deposited every time of installment received not at the time of last installment

your actual payments total:

55,00,000 + 55,00,000 + 13,75,000 = 1,23,75,000

So actual consideration appears to be Rs. 1,23,75,000, not Rs. 1.25 crore.

AI Summary

TDS on land purchase must be deducted on each instalment, not only at final payment, under section 194-IA. TDS on purchase of land under section 194-IA is to be deducted at the time of each payment or credit, whichever is earlier, and not only at the final instalment. The 1% TDS is to be calculated on the higher of the actual sale consideration or the stamp duty value, and deposited within the prescribed due date in the next month. Where consideration is paid in instalments, compliance should follow each instalment payment.