TDS on Property Purchase in India 2026 — The Complete Guide
When you buy immovable property in India — a flat, house, commercial unit or plot (other than agricultural land) — for ₹50 lakh or more, you the buyer are legally required to deduct 1% TDS from the payment to the seller and deposit it with the government under Section 194-IA. It is one of the most misunderstood compliances in Indian real estate: the seller often assumes they'll get the full price, and the buyer often forgets they are the one on the hook. This calculator applies the exact rules — the correct threshold, the higher-of-price-or-stamp-duty base introduced in October 2024, the no-PAN 20% rule, the joint-buyer Form 26QB split, and the interest and fees for missing the 30-day deadline — and it flags the single most expensive mistake: assuming 1% when the seller is an NRI.
How Property TDS Is Calculated
TDS = max(Sale Consideration, Stamp-Duty Value) × 1%
…only if that value is ₹50,00,000 or more, and the seller is a resident with a valid PAN.
- Base = the higher of what you pay and the property's stamp-duty/circle-rate value (w.e.f. 01-10-2024).
- Rate = 1% for a resident seller with a PAN; 20% if the seller has no PAN (Section 206AA).
- Threshold = ₹50 lakh, tested on the total property value — but once crossed, TDS is on the full amount.
- Who deducts = the buyer, using their own PAN (no TAN needed), via Form 26QB.
The NRI-Seller Trap — Section 195, Not 194-IA
If the seller is a non-resident (NRI), Section 194-IA does not apply at all. You must instead deduct TDS under Section 195, at the seller's capital-gains rate — for a long-term gain (property held over 24 months) that is 12.5% for transfers on or after 23 July 2024, plus surcharge and 4% cess; short-term gains are taxed at slab rates. You also need a TAN and file Form 27Q, not 26QB. Deducting a casual 1% on an NRI sale is a costly default: the department can recover the shortfall, interest and penalty from you, the buyer. Always get the seller's residential status in writing, and if the seller has a lower-deduction certificate under Section 197, apply that rate instead.
Form 26QB — Filing and Deadlines
| Item | 2026 position |
|---|---|
| Section | 194-IA (resident seller); 195 for NRI seller |
| Rate | 1% (resident + PAN); 20% (no PAN); CG rate under 195 for NRI |
| Threshold | ₹50 lakh — on total value; once crossed, TDS on full amount |
| Base (from 01-10-2024) | Higher of sale consideration and stamp-duty value |
| Who deducts | Buyer, using PAN (no TAN for 194-IA) |
| Form & deadline | Form 26QB within 30 days from end of month of payment |
| Certificate to seller | Form 16B, downloaded from TRACES after 26QB is processed |
| Joint buyers/sellers | One 26QB per buyer-seller pair, split by share |
Penalties for Getting It Wrong
| Default | Charge |
|---|---|
| Late deduction (Sec 201) | 1% per month from due date of deduction to actual deduction |
| Late deposit (Sec 201) | 1.5% per month (or part) from deduction date to deposit date |
| Late filing of 26QB (Sec 234E) | ₹200 per day of delay, capped at the TDS amount |
| Non-filing (Sec 271H) | Penalty ₹10,000 to ₹1,00,000 |
Because the 26QB window is only 30 days, these compound fast. The calculator above estimates the 201 interest (1.5%/month) and the 234E ₹200/day fee for the number of months you enter, so you can see the real cost of a slipped deadline.
Joint Buyers and Instalments
For a joint purchase, the 1% is on the total price but is reported per buyer-seller pair. Two buyers of one flat file two separate Form 26QBs, each deducting 1% on their share; the shares must total the full consideration. The ₹50 lakh threshold is judged on the whole property value, so a ₹90 lakh flat bought 50:50 still attracts TDS even though each ₹45 lakh share is below ₹50 lakh. For an under-construction property paid in instalments, deduct 1% on each instalment at payment, and file a 26QB for each, once the total agreement value is ₹50 lakh or more.
Common Property-TDS Mistakes to Avoid
- Taxing only the excess over ₹50 lakh. TDS is on the full value once the threshold is crossed.
- Using the agreement value when the circle rate is higher. Since 01-10-2024, TDS is on the higher of the two.
- Deducting 1% from an NRI seller. That's Section 195 territory — much higher, needs a TAN and Form 27Q.
- Filing one 26QB for joint buyers. Each buyer-seller pair needs its own form.
- Missing the 30-day deadline. 1.5%/month interest plus ₹200/day fee add up quickly.
- Not collecting the seller's PAN. No PAN means 20% TDS under 206AA.
- Forgetting Form 16B. The seller needs it to claim the TDS credit; issue it from TRACES.
Frequently Asked Questions
Is TDS on property 1% of the full value or only above ₹50 lakh?
Of the full value. Once the price or stamp-duty value is ₹50 lakh or more, 1% applies to the entire consideration, not just the part exceeding ₹50 lakh.
Who deducts and deposits the property TDS — buyer or seller?
The buyer. You deduct 1% from the payment, deposit it via Form 26QB using your PAN (no TAN needed), and give the seller Form 16B.
What is the due date for Form 26QB?
Within 30 days from the end of the month in which the payment or credit was made.
What if my seller is an NRI?
Section 194-IA does not apply. Deduct under Section 195 at the capital-gains rate (12.5% + surcharge + cess for long-term, from 23-07-2024), obtain a TAN and file Form 27Q. Do not deduct just 1%.
What if the seller has no PAN?
The rate rises to 20% under Section 206AA for a resident seller. Always collect a valid PAN before filing.
Does property TDS apply below ₹50 lakh?
No. There is no 194-IA TDS if both the consideration and the stamp-duty value are under ₹50 lakh.