The Supreme Court on Wednesday dismissed a public interest petition seeking institutional safeguards to ensure that property buyers are made aware of their obligation to deduct tax at source (TDS) when purchasing immovable property valued at over ₹50 lakh.
A bench comprising Justices Vikram Nath and Sandeep Mehta declined to entertain the plea, observing simply, “Dismissed.”
Appearing in person, the petitioner contended that under Section 194-IA of the Income Tax Act, 1961, property purchasers are required to deduct 1% TDS on transactions exceeding ₹50 lakh and deposit it with the government. However, the entire compliance burden is placed solely on the buyer.
He argued that this assumption presumes all buyers, including first-time purchasers, possess adequate knowledge of income-tax laws—a proposition he described as unreasonable and practically unworkable in the absence of awareness campaigns or verification mechanisms.
The petitioner claimed that there is currently no system in place at the stage of registration to ensure compliance with the TDS provision, nor any guidance for property buyers regarding their legal obligations.
To illustrate his point, the petitioner referred to his own experience as a first-time homebuyer, stating that he was unaware of the TDS requirement and only discovered the obligation later, by which time penalties and interest had accrued.
“This demonstrates that the issue is systemic. Many buyers complete registration without TDS verification,” he submitted, while clarifying that he was not challenging the validity of the legal provision or the tax liability itself.
The petitioner stated that his prayer was limited to seeking a direction for administrative safeguards—such as mandatory verification by sub-registrars or awareness mechanisms at the point of sale—to prevent inadvertent defaults.
“These safeguards would improve voluntary compliance, protect honest taxpayers, and safeguard government revenue,” he submitted.
Despite these submissions, the bench did not find merit in the arguments and dismissed the petition at the threshold.
