TDS on Property Purchase from a Resident Seller: Your Obligations as a Buyer
If you buy a flat, house, shop or plot (other than agricultural land) for ₹50 lakh or more, you, the buyer, must deduct 1% TDS from the price and deposit it with the government. This applies even if you are a salaried individual with no TAN. It is one of the most commonly missed compliances, and the department tracks it closely through registration data.
This article covers purchases from a resident seller. If the seller is an NRI, very different rules apply (see our article on NRI property sales).
The basic rule
| Point | Rule |
|---|---|
| Section | Old 194-IA → section 393(1) of the Income-tax Act, 2025 (from 1 April 2026) |
| When it applies | Consideration ₹50 lakh or more for immovable property other than agricultural land |
| Rate | 1% of the higher of the sale consideration and the stamp duty value |
| Who deducts | The buyer, at the time of payment or credit, whichever is earlier |
| TAN needed? | No. The buyer uses their PAN |
| Seller without a valid PAN | 20% |
What counts as “consideration”
The ₹50 lakh test and the 1% are calculated on the total consideration, including charges such as car parking, club membership, electricity and water connection fees, maintenance and advance fees collected by the builder along with the price.
GST on an under-construction flat: where the GST is shown separately, TDS is generally calculated on the amount excluding GST (CBDT Circular 23/2017).
Multiple buyers or sellers
- The ₹50 lakh threshold applies to the total consideration for the property, not each buyer’s share. This was clarified by the Finance (No.2) Act, 2024.
- Each buyer deducts TDS on their share of the payment and files a separate form.
- With two sellers, each buyer files a separate form for each seller, in proportion to the seller’s share.
Example: Husband and wife jointly buy a flat for ₹80 lakh (50:50) from two co-owner sellers. Each buyer pays ₹40 lakh, so TDS is ₹40,000 per buyer, split ₹20,000 per seller. That means four forms in total.
Under-construction property
When you pay in instalments (construction-linked plans), TDS is deducted on each instalment as you pay it, provided the total consideration is ₹50 lakh or more. Each instalment needs its own form within the due date.
If you take a home loan, the bank pays the builder directly, but the TDS obligation is still yours. Arrange with the bank to release 99% and pay the 1% yourself, or deposit the TDS separately.
How to file and pay: Form 26QB, now Form 141
From 1 April 2026, the challan-cum-statement for property TDS is Form 141, which replaces Form 26QB. The process on the portal is the same:
- Log in to incometax.gov.in → e-File → e-Pay Tax → New Payment and select TDS on sale of property (Form 141, or 26QB for deductions up to 31 March 2026).
- Enter buyer and seller PANs, addresses, property details, the agreement date, total consideration, stamp duty value, the amount paid now and the TDS.
- Pay through net banking, UPI or at the bank counter.
- Save the acknowledgement and challan (CIN).
Due date: within 30 days from the end of the month in which TDS is deducted. For example, a payment on 12 November 2026 must be deposited by 30 December 2026.
TDS certificate to the seller: Form 16B, now Form 132
- Register on TRACES (tdscpc.gov.in) as a taxpayer using your PAN.
- Download Form 132 (formerly 16B) a few days after payment, under Downloads → Form 16B / 132 (for the buyer).
- Give it to the seller within 15 days of the due date of the Form 141.
The seller claims the TDS as a credit in their ITR. It appears in their AIS and Form 168.
Penalties for delay or non-deduction
| Default | Consequence |
|---|---|
| TDS not deducted | Interest 1% per month from the date it should have been deducted. You may also be treated as an assessee in default for the TDS amount |
| Deducted but deposited late | Interest 1.5% per month |
| Form filed late | Late fee ₹200 per day, up to the TDS amount |
| Certificate not issued | Penalty of ₹100 per day, up to the TDS amount |
| Wrong PAN or details | Correct online through TRACES (buyer login) |
Frequently asked questions
The property is ₹49 lakh but the stamp duty value is ₹52 lakh. Is TDS needed?
Yes. TDS applies when the consideration or the stamp duty value is ₹50 lakh or more, and it is calculated on the higher figure.
Do I need TDS on a property bought below ₹50 lakh?
No TDS under this provision.
I forgot to deduct TDS on an earlier instalment. What now?
Deposit it now with interest, file the form (with the late fee), and issue the certificate. It is better to fix it before the department sends a notice.
What changes from 1 October 2026?
The Finance Act 2026 made a separate change for buyers purchasing from NRIs: resident individual and HUF buyers can deduct and deposit TDS using their PAN instead of a TAN. For resident sellers, buyers already use their PAN.
Buying property and want the TDS done right? Garvita Jain & Co. computes the TDS on every instalment, files Form 141 / 26QB, issues the seller’s certificate and keeps your records ready for the bank and the registrar. Contact us here, or at contact@garvitajainandco.com or +91 98678 16597.
This article is general information based on the law as of November 2026 and is not professional advice.
Sources
Official
- Income Tax e-filing portal, e-Pay Tax (TDS on sale of property)
- TRACES, download Form 16B / Form 132 (buyer login)
- CBDT Circular 23/2017 (TDS on the amount excluding GST), Income Tax Department
Professional / CA publications
- TaxGuru, TDS and TCS changes from 1 April 2026 (Form 141 replaces 26QB; Form 132 replaces 16B)
- TaxGuru, Complete TDS rate chart FY 2026-27 (194-IA → 393(1) Sl. 3(i))
- ClearTax, Section 194-IA: how to file TDS on sale of property