TDS on Property Purchase
Buying property worth ₹50 lakh or more? The buyer must deduct 1% TDS under Section 194-IA. Find the exact TDS and the net amount payable to the seller — live, as you type.
Detailed breakdown
Section 194-IAGet Form 26QB filed & the TDS certificate issued
We compute the correct TDS, file Form 26QB and generate the Form 16B for the seller — end to end.
Disclaimer: Indicative estimate under Section 194-IA of the Income-tax Act. Actual liability may vary for multiple buyers/sellers, instalment payments, NRI sellers (Sec 195 applies instead) and agricultural land (excluded). Verify before deducting.
TDS on property — the 194-IA essentials
When you buy an immovable property (land, building or part of a building, other than agricultural land) for ₹50 lakh or more, you as the buyer must deduct 1% TDS on the sale consideration under Section 194-IA and pay it to the government on the seller's behalf. It applies to residents; for NRI sellers, Section 195 governs at higher rates.
When does 194-IA apply?
The single trigger is the value of the property. If the total sale consideration — or the stamp-duty value, whichever is higher — is ₹50 lakh or more, TDS is mandatory. If it is below ₹50 lakh, no TDS is required at all.
₹50 lakh threshold
TDS kicks in only when consideration is ₹50,00,000 or more. A property sold for ₹49 lakh attracts no TDS under 194-IA. Once the threshold is crossed, TDS is charged on the full amount, not just the part above ₹50 lakh.
Stamp-duty value counts
The 1% is applied on the higher of the sale consideration and the stamp-duty (circle-rate) value of the property. If the stamp-duty value exceeds the agreement value, TDS is computed on the stamp-duty value.
No TAN needed
Unlike other TDS provisions, the buyer does not need a TAN. TDS is deposited using the buyer's and seller's PANs directly through Form 26QB, which doubles as the challan-cum-statement.
Multiple buyers or sellers
The ₹50 lakh limit is judged on the total property value, not each person's share. Where there are joint buyers or sellers, a separate Form 26QB is filed for each buyer-seller combination on their respective share.
Worked examples
A quick look at how the deduction plays out. The 1% is always on the full consideration once ₹50 lakh is crossed; the 20% no-PAN rate applies to the same base.
Filing Form 26QB — step by step
Form 26QB is a combined challan-cum-statement. After depositing the TDS, the buyer downloads Form 16B and hands it to the seller as proof of the tax deducted.
Deduct at payment
Deduct 1% (or 20% if no PAN) from each payment to the seller at the time of credit or payment, whichever is earlier.
File Form 26QB online
On the Income Tax e-filing portal (or TIN-NSDL), fill Form 26QB with the buyer's PAN, seller's PAN, property details and consideration.
Pay within 30 days
Deposit the TDS within 30 days from the end of the month in which the deduction was made, via net-banking or an authorised bank.
Download Form 16B
After the payment is processed on TRACES, download Form 16B (the TDS certificate) and give it to the seller within 15 days.
On what amount is the 1% TDS computed?
On the higher of the sale consideration and the stamp duty value of the property. Deducting on a consideration below circle rate leaves a short deduction that the buyer is liable for.
Is TDS deducted on instalments?
Yes. Where payment is made in instalments, TDS is deducted on each instalment at 1%, and a Form 26QB is filed for each. The ₹50 lakh test is on the total consideration, not on the instalment.
What are the consequences of not deducting?
Interest at 1% a month until deduction and 1.5% a month until payment, a ₹200-a-day fee under section 234E for the late 26QB, and a possible penalty. The liability rests with the buyer.
Is TDS applicable on agricultural land?
No. Section 194-IA expressly excludes agricultural land, though the exclusion turns on the statutory definition, not merely on how the land is described in the deed.
Can the seller avoid the deduction?
A resident seller cannot avoid 194-IA, but can apply under section 197 for a lower deduction certificate where the tax on the actual gain would be less than the TDS.
Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.