Property · 6 min read
TDS on Property Purchase in India: Section 194-IA, Form 26QB & 1%
By the India Law Simplified editorial team · Verified against primary government sources (bare Acts & official portals) · Last updated 2026-04-16
When you buy immovable property in India, you — the buyer — usually have to deduct TDS and deposit it with the government. Get this wrong and the seller cannot claim credit and your registration can stall. Here is the essential checklist.
1Section 194-IA: 1% on 50 lakh-plus
Under Section 194-IA, the buyer of immovable property (other than agricultural land) deducts 1% TDS where the consideration (or stamp-duty value) is 50 lakh or more, for a resident seller. You pay the seller the balance and deposit the 1% with the government.
Note: if the seller is a non-resident, Section 194-IA does not apply — instead Section 195 applies, usually at a higher rate. Confirm the seller's residential status before deducting.
2Form 26QB and Form 16B
Deposit the TDS using Form 26QB, a challan-cum-statement, within 30 days from the end of the month in which the deduction was made. There is no separate TAN needed for 194-IA — you use your PAN.
After filing Form 26QB, download Form 16B from TRACES and give it to the seller as proof of the TDS, so they can claim the credit in their return.
3Buyer's checklist and pitfalls
Deduct on each instalment if you pay in parts. Common mistakes: forgetting that TDS is due once the deal is 50 lakh or more, missing the 30-day Form 26QB deadline, entering a wrong PAN, or not handing over Form 16B.
If the registered value is below the stamp-duty value, special valuation provisions may apply — take professional help for high-value or NRI-seller deals.
Frequently asked questions
Is TDS due if the property is below 50 lakh?
No. Section 194-IA applies only where the consideration or stamp-duty value is 50 lakh or more (resident seller). Below that, no TDS is deducted under this section.
What if the seller is an NRI?
Section 194-IA does not apply; TDS is deducted under Section 195, usually at a higher rate and requiring a TAN. Get a CA involved, and consider a lower-deduction certificate.
Is this legal advice?
No. Property and TDS rules are fact-specific. Confirm with a CA or property advocate before the transaction.
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