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Guide · TDS

TDS on Property Purchase — Section 194-IA & Form 26QB

The 1% TDS a buyer must deduct on property worth ₹50 lakh or more, the stamp-duty-value rule, how to pay via Form 26QB, issuing Form 16B, and what changes when the seller is an NRI — for FY 2025-26.

Written by
TaxClue Editorial Desk
Updated
18 August 2026
Reading time
6 min
Questions
15 answered
  • Updated August 2026
  • Section 194-IA · Form 26QB
  • CA-reviewed
Quick Answer

When you buy immovable property (other than agricultural land) for ₹50 lakh or more, you as the buyer must deduct TDS at 1% under Section 194-IA and pay it to the government through Form 26QB. Since 1 Oct 2024, the 1% is charged on the higher of the sale consideration or the stamp-duty value, and on the full amount — not just the part above ₹50 lakh. The buyer needs only a PAN (no TAN); if the seller has no PAN, deduct at 20% under Section 206AA. If the seller is an NRI, Section 194-IA does not apply — use Section 195.

At a glance

TDS on Property — Key Facts

The core rule for a resident-to-resident property sale under Section 194-IA for FY 2025-26. See where this sits in the full TDS rate chart 2025-26.

ParameterDetail
Applicable section194-IA
TDS rate (resident seller)1% of consideration or stamp-duty value, whichever is higher
Threshold₹50,00,000 or more (on the whole property, aggregated across all buyers & sellers)
TDS computed onFull value — not just the amount above ₹50 lakh
Who deductsBuyer (transferee) — PAN is enough, no TAN required
Form to file / payForm 26QB (challan-cum-statement)
Deposit deadlineWithin 30 days from the end of the month of deduction
Certificate to sellerForm 16B from TRACES, within 15 days of the 26QB due date
Seller has no PANTDS at 20% under Section 206AA
Seller is an NRI194-IA does not apply — use Section 195 (see below)

Agricultural land is outside Section 194-IA. Rates are unchanged for FY 2025-26; the stamp-duty-value and aggregate-consideration rules apply from 1 Oct 2024.

1% is on the total, not the excess

For a ₹75 lakh flat the TDS is 1% × ₹75,00,000 = ₹75,000 — not 1% of the ₹25 lakh above the threshold. And since 1 Oct 2024, if the stamp-duty (circle-rate) value is higher than the agreed price, the 1% is computed on that higher stamp-duty value.

Step by step

How to Pay TDS on Property via Form 26QB

The whole process is online and needs no TAN — only the buyer's and seller's PAN. If you pay the seller in instalments, deduct 1% on each instalment and file a separate Form 26QB each time.

  1. 1Buyer deducts 1%On each payment / instalment at payment or credit
  2. 2File Form 26QBOn the income-tax portal within 30 days of month-end
  3. 3Pay TDSNet-banking or challan at an authorised bank
  4. 4Issue Form 16BDownload from TRACES & give to the seller

1% Resident seller — ₹75,00,000 flat

Sale consideration₹75,00,000
Stamp-duty value₹78,00,000
TDS @ 1% on higher value₹78,000
Net paid to seller₹74,22,000

1% Instalment — ₹10,00,000 booking

This instalment₹10,00,000
TDS @ 1%₹10,000
Property value (≥ ₹50L)Yes
Deposit via 26QB₹10,000
  • Check the threshold — the whole property (aggregate of all buyers & sellers) must be ₹50 lakh or more.
  • Collect the seller's PAN — without it, TDS is 20% under Section 206AA.
  • File Form 26QB on incometax.gov.in → e-File → e-Pay Tax → 26QB; enter both PANs, property details and the amount paid.
  • Pay TDS and note the acknowledgement number.
  • Download Form 16B from TRACES (tdscpc.gov.in) after 10–15 days and hand it to the seller.
TaxClue Insight — no TAN, one PAN

Unlike business TDS (194C, 194J, 194-I), a property buyer does not need a TAN under 194-IA — Form 26QB works on PAN alone. But you still must deduct on every instalment: paying only at registration and ignoring the booking advance is the single most common 26QB default.

Buying a home or plot? Get your Form 26QB filed and Form 16B issued correctly.

Get Form 26QB Help →
Different rules

When the Seller Is an NRI — Section 195

Section 194-IA covers resident sellers only. If the seller is a non-resident, the buyer must deduct TDS under Section 195 at much higher rates, must obtain a TAN, and pays through Challan 281 (not Form 26QB). The TDS is on the whole sale value, so the NRI usually applies for a lower-deduction certificate under Section 197 to limit it to the actual capital-gains tax.

1%

Resident seller (Sec 194-IA)

  • TDS 1% of consideration / stamp-duty value
  • Buyer needs only PAN — no TAN
  • Pay via Form 26QB in 30 days
  • Certificate: Form 16B from TRACES
  • Fixed 1% — no lower-TDS route
12.5%+

NRI seller (Sec 195)

  • LTCG 12.5% (+surcharge +4% cess); higher if STCG
  • Buyer must obtain a TAN
  • Pay via Challan 281; return in Form 27Q
  • Certificate: Form 16A from TRACES
  • NRI may apply u/s 197 for lower TDS
PointResident (194-IA)NRI (195)
TDS rate1% of value12.5%+ on LTCG (higher if STCG)
Buyer needs TANNoYes
Form / challanForm 26QBChallan 281 · Form 27Q
Certificate to sellerForm 16BForm 16A
Lower-TDS option—Section 197 certificate

NRI surcharge: 10% (gains ₹50L–₹1Cr), 15% (₹1Cr–₹2Cr), 25% (above ₹2Cr), plus 4% cess. Always confirm residential status before deducting.

Seller is an NRI? Get the TAN, Section 195 rate and lower-TDS certificate handled.

Talk to a TDS Expert →
Avoid these

Common Mistakes & Consequences

  • Deducting only on the excess over ₹50L — TDS is 1% of the full value.
  • Ignoring the stamp-duty value — since 1 Oct 2024, use the higher of price or stamp-duty (circle-rate) value.
  • Skipping instalments — deduct on each payment, not only at registration.
  • Counting the 30 days from registration — it runs from the end of the month of payment/deduction.
  • Applying 1% to an NRI seller — that is Section 195 (12.5%+, with TAN), not 194-IA.
DefaultConsequence
TDS not deductedInterest 1%/month u/s 201 from due date to deduction
Deducted but not depositedInterest 1.5%/month u/s 201 to date of deposit
Late filing of Form 26QBLate fee ₹200/day u/s 234E
Failure to deductPenalty up to 100% of TDS u/s 271C

Section 206AB (higher rate for non-filers) was omitted w.e.f 1 Apr 2025 — you no longer run a filing-status check on the seller; only the PAN-based 20% rate survives.

Buyer's 194-IA compliance checklist

  • Confirm whole-property value ≥ ₹50 lakh
  • Collect seller's valid PAN
  • Compare price vs stamp-duty value
  • Deduct 1% on each payment / instalment
  • File & pay Form 26QB within 30 days of month-end
  • Download Form 16B from TRACES for the seller
New law from 1 April 2026: section 393 and Form No. 141

For payments made on or after 1 April 2026 (tax year 2026-27), the Income-tax Act, 2025 carries property TDS in its consolidated TDS table in section 393, and the Income-tax Rules, 2026 replace Form 26QB with the single challan-cum-statement Form No. 141 (rule 218) and Form 16B with Form No. 132 (rule 215). The 1% rate and ₹50 lakh threshold carry over. Payments made up to 31 March 2026 stay under Section 194-IA, Form 26QB and Form 16B.

Sources
  1. Bare provision: incometax.gov.in — Section 194-IA, Income-tax Act 1961
  2. Form 26QB / 16B: TRACES (tdscpc.gov.in)
  3. Stamp-duty value & aggregate-consideration rule: Finance (No. 2) Act 2024 (eff. 1 Oct 2024)
  4. Section 206AB omitted w.e.f 1 Apr 2025 — Finance Act 2025

Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position or speak to our CA team before you act on it.

People also ask

TDS on Property — Frequently Asked Questions

Short, direct answers to the 15 questions readers ask most on this topic.

The buyer must deduct TDS at 1% of the sale consideration when buying immovable property (other than agricultural land) for ₹50 lakh or more. Since 1 October 2024, the 1% is charged on the higher of the sale consideration or the stamp-duty (circle-rate) value. If the seller does not furnish a valid PAN, the rate rises to 20% under Section 206AA.

No. Once the property value is ₹50 lakh or more, TDS at 1% applies on the full value, not just the portion exceeding ₹50 lakh. For a ₹75 lakh property the TDS is 1% × ₹75,00,000 = ₹75,000. If the stamp-duty value is higher than the agreed price, the 1% is computed on that higher stamp-duty value.

TDS is deducted at the time of payment or credit to the seller, whichever is earlier. If you pay in instalments, deduct 1% on each instalment as it is paid — not only at registration. A separate Form 26QB is filed for each payment.

No. Section 194-IA specifically excludes rural agricultural land, so no 1% TDS applies on its purchase regardless of value. TDS on property under 194-IA applies to other immovable property — flats, houses, commercial units, plots and buildings — of ₹50 lakh or more.

Form 26QB is filed online on the income-tax portal (incometax.gov.in → e-File → e-Pay Tax → Form 26QB) or via the TIN/Protean facility. Enter the buyer's PAN, seller's PAN, property details, total consideration and the amount being paid, then pay the TDS by net-banking or challan. No TAN is required — only PAN. Keep the acknowledgement number for downloading Form 16B.

Form 26QB must be filed and the TDS deposited within 30 days from the end of the month in which the deduction was made. For example, a payment made on 15 July must have the TDS deposited by 30 August. Late filing attracts a fee of ₹200 per day under Section 234E, plus interest under Section 201.

Form 16B is the TDS certificate for a property transaction. After filing Form 26QB and paying the TDS, the buyer registers on TRACES (tdscpc.gov.in), downloads Form 16B (available about 10–15 days after deposit) and issues it to the seller within 15 days of the Form 26QB due date. The seller uses it to claim TDS credit in their income-tax return.

No. For a resident-seller purchase under Section 194-IA, the buyer does not need a TAN — Form 26QB works on the buyer's PAN alone. A TAN is required only when the seller is an NRI and TDS is deducted under Section 195.

If the seller does not furnish a valid PAN, the buyer must deduct TDS at 20% instead of 1%, under Section 206AA. Without the seller's PAN the buyer also cannot generate Form 16B, which blocks the seller from claiming TDS credit. The seller should obtain a PAN before registration to avoid the higher rate.

When the seller is a non-resident, Section 194-IA does not apply — the buyer deducts TDS under Section 195. Long-term capital gains (property held over 24 months) are taxed at 12.5% plus surcharge and 4% cess; short-term gains are taxed at slab/30% plus surcharge and cess, on the whole sale value. The buyer must obtain a TAN and file Form 27Q. The NRI can apply under Section 197 for a lower-deduction certificate.

No. Section 206AB, which imposed a higher TDS rate on non-filers of income-tax returns, was omitted with effect from 1 April 2025. For property purchases you now only need the seller's valid PAN; a missing PAN triggers the 20% rate under Section 206AA.

From 1 October 2024, the ₹50 lakh threshold is tested on the aggregate consideration for the whole property across all buyers and sellers. So even if your individual share is below ₹50 lakh, TDS applies if the total property value is ₹50 lakh or more. Each buyer-seller combination still files its own Form 26QB for its share of the payment.

One Form 26QB is filed for each buyer-seller combination. With two buyers and two sellers there are four combinations, so four Form 26QB filings are required, each reflecting that buyer's share of the consideration paid to that specific seller. The ₹50 lakh threshold, however, is judged on the whole property value.

If TDS is not deducted, interest of 1% per month applies under Section 201 until it is deducted; if deducted but not deposited, interest is 1.5% per month until deposit. Late filing of Form 26QB attracts ₹200 per day under Section 234E, and a complete failure to deduct can attract a penalty of up to 100% of the TDS under Section 271C.

Yes, in name and forms. The Income-tax Act, 2025 applies to payments from 1 April 2026 (tax year 2026-27): property TDS sits in the consolidated TDS table in section 393, the deposit and statement move from Form 26QB to Form No. 141 (a single challan-cum-statement under rule 218 of the Income-tax Rules, 2026), and the certificate moves from Form 16B to Form No. 132. The 1% rate and the ₹50 lakh threshold carry over. A payment made up to 31 March 2026 is still reported under Section 194-IA in Form 26QB, with Form 16B.