TaxTMI 
TaxTMI 
Analysis of TDS on Immovable Property Transfers : Clause 393(1)[Table: S.No. 3(i)] of the Income Tax Bill, 2025 vs. Section 194IA of the Income-tax Act, 1961
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....ced to address this concern, and with the proposed Income Tax Bill, 2025, Clause 393(1)[Table: S.No. 3(i)] seeks to update and consolidate these provisions. This commentary undertakes a detailed, item-wise analysis of Clause 393(1)[Table: S.No. 3(i)] of the Income Tax Bill, 2025, followed by a comprehensive comparison with the existing Section 194IA of the Income Tax Act, 1961. The analysis covers the scope, applicability, procedural aspects, legal interpretations, ambiguities, and practical implications for stakeholders. Objective and Purpose The legislative intent behind both Section 194IA and Clause 393(1)[Table: S.No. 3(i)] is to ensure that transactions involving the transfer of immovable property (other than agricultural land) are ....
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....d) to a resident. The wide language ensures coverage of all such transactions, except those specifically carved out under other serials (notably, compulsory acquisition). 3. Threshold and Computation The threshold for deduction is set at Rs. 50,00,000, which aligns with the intent to target high-value transactions. The crucial point is that the threshold is determined not only by the consideration but also by the stamp duty value. If either the consideration or the stamp duty value exceeds Rs. 50,00,000, TDS is triggered. The provision also clarifies that where there are multiple transferors or transferees, the aggregate consideration is to be considered. This prevents fragmentation of transactions to avoid TDS. 4. Rate and Base of Dedu....
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.... For Transferors (Sellers) * Credit for TDS deducted can be claimed while filing income tax returns. * Transaction trail established, reducing scope for under-reporting of capital gains. * Potential mismatch if consideration declared is less than stamp duty value, leading to higher TDS deduction and possible disputes. 3. For Registrars and Regulatory Authorities * May require verification of TDS compliance before registration of property transfers. * Increased reporting and information-sharing with tax authorities. 4. Compliance Requirements * Timely deduction and deposit of TDS. * Filing of TDS returns and issuance of TDS certificates. * Maintenance of records for aggregation of consideration in multi-party transactions. ....
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....eduction. * Incidental Charges: Both provisions include incidental charges in the definition of "consideration". * Exclusion: Both exclude agricultural land. 3. Differences and Unique Features * Drafting Style and Consolidation: Clause 393(1) is part of a consolidated TDS regime, listing all TDS events in a single table, whereas Section 194IA is a standalone section. * Reference to Other Provisions: Clause 393(1) specifically excludes transactions covered under serial number 3(iii) (compulsory acquisition), creating clarity on overlap with other TDS provisions. * Notes and Tie-Breakers: The 2025 Bill includes explicit notes clarifying aggregation and tie-breaker rules where multiple provisions may apply, reducing ambiguity. * P....
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....ified in the definitions section. * Aggregation in Joint Purchases/Sales: Both provisions now clarify that aggregation is required, but practical issues may arise in apportioning TDS and reporting in joint ownership scenarios. * Stamp Duty Value: Both require TDS on the higher of consideration or stamp duty value, but disputes may arise if stamp duty value is disputed or under appeal. * Procedural Compliance: The absence of an explicit TAN exemption in the 2025 Bill may create confusion for individual buyers unless clarified in rules. 5. Policy Evolution and Rationale The evolution from Section 194IA to Clause 393(1) reflects a move towards consolidation, simplification, and harmonization of TDS provisions. The explicit references t....