TDS on Property Sale From 1st October 2012


TDS on property sale is another bad news out of Budget 2012 proposals . The earlier bad news  from Budget 2012 was about imposition of  Alternate Minimum Tax on almost  everyone.Now , the fine print of Finance Bill 2012 shows that government has provided by inserting section 194LLA effective  from 1st October 2012  that  every transferee, at the time of making payment or crediting any sum by way of consideration for transfer of immovable property (other than agricultural land), shall deduct tax, at the rate of 1%  of such sum, if the consideration paid or payable for the transfer of such property exceeds –budgetTDS

(a) fifty lakh rupees in case such property is situated in a specified urban agglomeration; or

(b) twenty lakh rupees in case such property is situated in any other area.

TDS on stamp duty valuation

It is further proposed to provide that where the consideration paid or payable for the transfer of such property is less than the value adopted or assessed or assessable by any authority of a State Government for the purposes of payment of stamp duty, the value so adopted or assessed or assessable shall be deemed as consideration paid or payable for the transfer of such immovable property.

No registration of property if TDS proof is not attached

For better compliance, it is also proposed to provide that a registering officer appointed under the Indian Registration Act, 1908 (Registrar) shall not register the transfer of any immovable property where taxes are required to be deducted under this provision unless the transferee furnishes proof of deduction and payment of TDS.

TAN not required

The transferee would not be required to obtain any Tax Deduction and Collection Account Number (TAN) or to furnish any TDS statement as this would be mostly a one time transaction. The transferor would get credit of TDS like any other pre-paid taxes on the basis of information furnished by the transferee in the challan of payment of TDS.

Simple TDS payment challan

For reducing the compliance burden on the transferee, it is also proposed that a simple one page challan for payment  of TDS would be prescribed containing details (including PAN) of transferor and transferee and also certain details of the property.


  1. please do clarify the court ruling of 2008, mentioned in this sight, has the court ruling being done? is it
    clear that the period counted from the date of purchase agreement of the flat & not the date of.
    possession, which comes after a long time, in the meantime the flat owner is already started residing in the said property. In case one wants to sell, which period is considered? date of Purchase agreement or the date.
    of possession agreement?