Page last updated:
TDS on Sale of Property: What the Seller Should Know
When you sell property, the buyer deducts TDS and pays it on your behalf. A resident seller suffers 1% TDS when the price is ₹50 lakh or more. An NRI seller faces much higher TDS based on capital gains rates, usually on the whole sale price unless a lower-deduction certificate is obtained. The TDS is credited against your final tax when you file your return.
Quick answer (FY 2025-26 and FY 2026-27)
- TDS rate
- 1% (resident) / 12.5%+ (NRI)
- Threshold
- ₹50 lakh for residents; none for NRIs
TDS on sale of property: rate chart
| Payment | Section (1961 Act) | New section (2025 Act) | Rate | Threshold |
|---|---|---|---|---|
| Resident seller, any property other than rural agricultural land | 194-IA | 393(1), Sl. No. 3(i) | 1% | ₹50 lakh or more |
| NRI seller, long-term (held over 24 months) | 195 | 393(2) | 12.5% + surcharge + 4% cess | No threshold |
| NRI seller, short-term (held 24 months or less) | 195 | 393(2) | 30% + surcharge + 4% cess | No threshold |
Resident seller: 1% TDS and your capital gains tax
The 1% deducted by the buyer is not your final tax. Long-term capital gains on property are taxed at 12.5% without indexation. For property bought before 23 July 2024, resident individuals and HUFs can instead pay 20% with indexation if that is lower. Short-term gains are taxed at your slab rates.
Check that the TDS appears in your Form 26AS and AIS, collect Form 16B from the buyer, and claim the credit when you file your return. If your tax is lower than the TDS, the excess is refunded.
NRI seller: why TDS is so high and how to reduce it
For a non-resident, the buyer deducts TDS at the capital gains rate plus surcharge and cess. Unless the NRI produces a lower-deduction certificate, buyers usually apply it to the full sale price, which can be several times the actual tax.
The NRI can apply online in Form 13 for a lower or nil deduction certificate based on the expected gain. Surcharge on long-term gains is 10% when income exceeds ₹50 lakh and 15% above ₹1 crore, so effective TDS on long-term gains ranges from about 13% to 14.95% of the amount.
TDS on sale of property calculator
Runs in your browser. Nothing you enter is sent anywhere.
NRI figures assume TDS on the full price at 12.5% plus surcharge and cess. With a lower-deduction certificate, TDS is on the certified amount instead.
Frequently Asked Questions
How much TDS is deducted when I sell property?
Is the 1% TDS my final tax on the sale?
What is the TDS on sale of property by an NRI?
How can an NRI reduce TDS on property sale?
Where do I see the TDS deducted by the buyer?
What is the capital gains tax rate on property in 2026?
When is TDS on property paid, and which form is given to the seller?
What happens if TDS on sale of property 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.