TDS on Property Sale — Section 194IA

Updated: 3 June 2026

Under Section 194IA, the buyer must deduct 1% TDS when purchasing immovable property (excluding agricultural land) worth ₹50 lakh or more. The TDS is deposited via Form 26QB within 30 days from end of the month of deduction, and Form 16B issued to the seller.

TDS rate under Section 194IA on property purchases of ₹50 lakh or more. No TAN required for the buyer — only PAN of both buyer and seller is needed.

Section 194IA — Key Details at a Glance

Parameter	Details
Applicable Section	Section 194IA, Income Tax Act 1961
Who Deducts	Buyer of property (individual or entity)
Who Bears TDS	Seller (deducted from payment to seller)
TDS Rate	1% of sale consideration
Threshold	Sale consideration ≥ ₹50,00,000
Property Type	Immovable property — NOT agricultural land
TAN Requirement	Not required (use PAN of buyer)
Deposit Form	Form 26QB on TIN-NSDL portal
Deposit Deadline	Within 30 days from end of month of deduction
TDS Certificate	Form 16B (issued by buyer to seller)
Certificate Deadline	Within 15 days of due date of quarterly return
No PAN (buyer or seller)	TDS rate becomes 20%
NRI Seller	Section 195 applies instead (20%–30% + surcharge)

How to File Form 26QB — Step by Step

Visit tin.tin.nsdl.com (TIN-NSDL portal) and click "e-Payment of Taxes" in the top menu.
Select Form 26QB — "TDS on Sale of Property" from the list of challan forms.
Enter Buyer's PAN and Seller's PAN. Enter the property address, type (residential/commercial), and sale agreement date.
Enter the total sale consideration (full purchase price, not just the instalment paid). The portal will auto-calculate 1% TDS.
Enter the amount paid/credited in the current transaction if paying in instalments (TDS applies on each instalment).
Select payment mode: Net Banking (immediate online payment) or Over the Counter at authorised bank branches.
Complete payment. Save the 9-digit acknowledgment number — needed to download Form 16B later.
After 5 working days, log in to TRACES portal (tdscpc.gov.in) with buyer's PAN, download and issue Form 16B to the seller.

TDS on Stamp Duty Value vs Sale Consideration

If the sale consideration is ₹50 lakh or more but is lower than the stamp duty value (circle rate value), Section 194IA TDS must be computed on the higher of the two values — the stamp duty value or the agreed sale price. This was amended by the Finance Act 2022 to align with Sections 43CA and 50C. However, if the difference between sale price and stamp duty value is within 10%, no adjustment is required.

Penalties for Non-Deduction / Non-Deposit

Failure to deduct TDS: Interest at 1% per month from the date of deductibility to actual deduction date. Failure to deposit after deduction: Interest at 1.5% per month from deduction date to deposit date. Additionally, a late filing fee of ₹200 per day under Section 234E applies until Form 26QB is filed (maximum equal to TDS amount). Non-deposit can also trigger prosecution under Section 276B.

Frequently Asked Questions

What is TDS on property purchase in India under Section 194IA?

Section 194IA of the Income Tax Act requires the buyer of immovable property (other than agricultural land) to deduct 1% TDS from the payment made to the seller, when the sale consideration is ₹50 lakh or more. The buyer (not a tax deductor under TAN) deposits this TDS using Form 26QB on the TIN-NSDL portal within 30 days from the end of the month in which the deduction was made. The seller gets credit for this TDS in their Form 26AS and can adjust it against their tax liability when filing their income tax return.

How to deposit TDS on property via Form 26QB?

Form 26QB is filed on the TIN-NSDL website (tin.tin.nsdl.com). Steps: (1) Go to TIN-NSDL and select "e-Payment of Taxes"; (2) Select Form 26QB (TDS on Property); (3) Enter buyer and seller PAN, property details, and sale consideration; (4) Enter TDS amount (1% of consideration); (5) Select payment mode (net banking or over-the-counter at authorised banks); (6) Make payment and save the 9-digit acknowledgment number; (7) Download Form 16B (TDS certificate) after 5 working days from payment; (8) Issue Form 16B to the seller within 15 days of the due date of quarterly TDS return.

What is Form 16B for property purchase?

Form 16B is the TDS certificate issued by the property buyer to the seller as proof that TDS has been deducted and deposited with the government. It must be issued within 15 days of the due date for furnishing Form 26QB (which is within 30 days from end of month of deduction). Form 16B can be downloaded from the TRACES (TDS Reconciliation Analysis and Correction Enabling System) portal after logging in with the buyer's PAN. The seller uses Form 16B to verify the TDS credit reflected in their Form 26AS and claim the deduction in their ITR.

What is the TDS rate when buying property from an NRI seller?

When the seller is a Non-Resident Indian (NRI), Section 194IA does NOT apply. Instead, Section 195 governs TDS on payments to NRIs. The buyer must deduct TDS at the applicable rate on the full sale consideration — typically 20% (plus surcharge and cess) on Long-Term Capital Gains, or 30% (plus surcharge and cess) on Short-Term Capital Gains. The NRI seller can apply for a lower TDS certificate from the Assessing Officer under Section 197 if the actual tax liability is lower. The buyer also needs a TAN (Tax Deduction Account Number) for Section 195 deductions, unlike 194IA.

Is TDS applicable on property purchased at less than ₹50 lakh?

No. Section 194IA applies only when the sale consideration is ₹50 lakh or more. If the agreed sale price is below ₹50 lakh, no TDS needs to be deducted by the buyer, even if the stamp duty value (circle rate) is higher. However, if the sale consideration is ₹50 lakh or more but less than the stamp duty value, TDS must be computed on the higher of (a) sale consideration or (b) stamp duty value as per Section 43CA/50C provisions. From July 2021, if the difference between sale price and stamp duty value is within 10%, no adjustment is needed.

Tds On Property Sale Near You

Expert CA/CS assistance for tds on property sale across India. Click your city for local details.

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