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TDS on Property Purchase: 1% Under Section 194-IA
When you buy a flat, house, plot or commercial property for ₹50 lakh or more from a resident seller, you deduct 1% TDS from the payment and deposit it with Form 26QB. The 1% is on the higher of the sale price and the stamp duty value. Agricultural land in rural areas is excluded.
Quick answer (FY 2025-26 and FY 2026-27)
- TDS rate
- 1%
- Threshold
- Consideration of ₹50 lakh or more
TDS on property purchase: rate chart
| Payment | Section (1961 Act) | New section (2025 Act) | Rate | Threshold |
|---|---|---|---|---|
| Purchase of immovable property from a resident seller | 194-IA | 393(1), Sl. No. 3(i) | 1% of price or stamp duty value, whichever is higher | ₹50 lakh or more |
| Purchase from a non-resident (NRI) seller | 195 | 393(2) | 12.5% (long-term) or 30% (short-term), plus surcharge and cess | No threshold |
How to deposit TDS on property purchase
The buyer fills Form 26QB on the income tax portal with both PANs and the property details, and pays the TDS within 30 days from the end of the month in which it was deducted. No TAN is needed. Within 15 days of the due date for Form 26QB, download Form 16B from TRACES and give it to the seller.
If you pay in instalments, deduct 1% from each instalment, including payments to the builder for under-construction flats.
The ₹50 lakh test, joint buyers and stamp duty value
From 1 October 2024, the ₹50 lakh limit looks at the total consideration for the property, even if there are several buyers or sellers. Two buyers each paying ₹30 lakh for a ₹60 lakh flat both deduct TDS.
TDS is 1% of the higher of the agreed price and the stamp duty value. Charges such as club membership, car parking and maintenance deposits collected by the builder are included in the consideration.
Buying from an NRI
Section 194-IA does not apply when the seller is a non-resident. The buyer then needs a TAN, deducts TDS under old Section 195 (now 393(2)) at the capital gains rate plus surcharge and cess, and files Form 27Q. The NRI seller can apply for a lower-deduction certificate so that TDS is on the actual gain instead of the whole price.
TDS on property purchase calculator
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For an NRI seller, use the sale of property page for the higher rates.
Frequently Asked Questions
What is the TDS on property purchase?
Is TDS deducted on a property of exactly ₹50 lakh?
Which form is used to pay TDS on property purchase?
Does the buyer need a TAN for 194-IA?
How is the ₹50 lakh limit applied for joint buyers?
What is the new section for 194-IA?
What if the seller has no PAN?
When is TDS on property paid, and which form is given to the seller?
What happens if TDS on property purchase is not deducted or deposited on time?
How can the payee check the TDS deducted?
Did the Income-tax Act 2025 change TDS rates from April 2026?
New section references are to the Income-tax Act, 2025, in force from 1 April 2026. Verify the table serial number against the official text before quoting it in a return or notice reply.