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TDS on Property (Section 194-IA)

When you buy property worth ₹50 lakh or more, you (the buyer) must deduct 1% TDS from the seller's payment, deposit it via Form 26QB, and issue Form 16B. Skip this and you're personally liable.

₹75,00,000
₹75,00,000

TDS on the HIGHER of sale & stamp duty (post Oct 2024).

1
1
Total TDS to deposit
₹75,000
1% of ₹75,00,000
Per buyer (deposit)
₹75,000
Per seller (credit)
₹75,000
26QB filings
1
Rate
1%

Buyer's checklist

  1. Deduct 1% from each instalment (or lump-sum) paid to the seller — not at registration alone.
  2. Deposit the deducted amount via Form 26QB on TIN-NSDL within 30 days from end of the deduction month.
  3. Issue Form 16B to the seller within 15 days of 26QB filing — download from TRACES portal.
  4. Multiple buyers/sellers? File a separate 26QB for each buyer-seller pair.

Stamp duty value rule (post Oct 2024)

From 1 October 2024, TDS is computed on the higher of sale consideration and stamp duty value. Earlier the rule was "each buyer's share < ₹50L" — that loophole is closed. Aggregate consideration is what matters.

Common mistakes

  • Filing one 26QB for two sellers — wrong. One per pair.
  • Computing TDS on agreement value but stamp duty was higher — pay on the higher.
  • Forgetting Form 16B — seller can't claim credit in their ITR without it.
  • Buying NRI's property — 194-IA does NOT apply; section 195 does, at higher rates.