TDS on Property Purchase — Form 26QB Filing Guide (Section 194-IA)

What is TDS on Property Purchase?

Under Section 194-IA of the Income Tax Act, 1961, the buyer of immovable property must deduct TDS (Tax Deducted at Source) at 1% of the total sale consideration if the property value exceeds ₹50 lakh.

This TDS is deducted from the payment made to the seller and deposited with the government through Form 26QB.

Key Point: The responsibility to deduct and deposit TDS lies entirely with the buyer, not the seller.

When Does TDS Apply?

Important Clarifications

• The ₹50 lakh threshold applies to the total consideration (including stamp duty value if higher)
• TDS applies to land, building, or part of building (residential or commercial)
• Agricultural land (as defined in Section 2(14)) is excluded
• If seller is an NRI, Section 194-IA does not apply — TDS is deducted under Section 195 at higher rates (20-30% depending on holding period)
• Buyer does not need a TAN — PAN is sufficient for filing Form 26QB

TDS Rate

Always collect the seller's PAN before making payment. Without it, the TDS rate jumps to 20%.

How to File Form 26QB Online — Step-by-Step

Step 1: Go to TIN-NSDL Portal

Visit: https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

Select "e-Payment of TDS on property (Form 26QB)"

Step 2: Fill in Buyer (Deductor) Details

• PAN of buyer
• Name, address, contact details
• Category (Individual/HUF/Company)
• If multiple buyers, each files a separate 26QB for their share

Step 3: Fill in Seller (Deductee) Details

• PAN of seller
• Name, address, contact details
• If multiple sellers, file separate 26QB for each seller's share

Step 4: Enter Property Details

• Complete address of the property
• Type of property (land, building, flat)
• Date of agreement/booking
• Date of payment
• Total consideration amount
• Amount paid/credited in this installment
• TDS amount (1% of payment)

Step 5: Payment of TDS

Choose payment mode:

• Net Banking (through authorized banks)
• NEFT/RTGS (generate challan and transfer)

Complete the payment. You will receive a challan receipt with acknowledgment number.

Step 6: Download Acknowledgment

After successful payment, download and save:

• Form 26QB acknowledgment
• Challan counterfoil (CIN — Challan Identification Number)

Timeline for Filing Form 26QB

How to Download Form 16B (TDS Certificate)

After filing Form 26QB, the buyer must issue Form 16B (TDS certificate) to the seller. Here's how:

Step 1: Wait for Processing

Form 16B is available on TRACES portal 10-15 days after 26QB payment reflects in the seller's Form 26AS.

Step 2: Register/Login on TRACES

Visit: https://www.tdscpc.gov.in/app/login.xhtml

• Register as a taxpayer (not deductor)
• Login with PAN, date of birth, and password

Step 3: Download Form 16B

• Go to Downloads → Form 16B (for Buyer)
• Enter the acknowledgment number of Form 26QB
• Select assessment year
• Download and digitally verify the certificate
• Share Form 16B with the seller

The seller needs Form 16B to claim TDS credit in their income tax return. It's your legal obligation to issue it within 15 days of filing Form 26QB.

Multiple Buyers or Sellers

Multiple Buyers

• Each buyer files a separate Form 26QB for their proportionate share
• Example: Property worth ₹1 crore, 2 buyers (50:50) → Each files 26QB for ₹50 lakh, deducting ₹50,000 TDS

Multiple Sellers

• The buyer files separate Form 26QB for each seller
• Example: Property worth ₹80 lakh, 2 sellers (50:50) → Buyer files two 26QBs of ₹40 lakh each, deducting ₹40,000 TDS each

Installment Payments

• TDS must be deducted on each installment (including booking amount, construction-linked payments)
• File separate Form 26QB for each payment
• The ₹50 lakh threshold applies to the total agreement value, not individual installments

Penalty for Non-Compliance

Don't ignore TDS obligations. The penalties can be severe, and the income tax department actively tracks property transactions through registration data.

Important Tips

1. File 26QB within 30 days of month-end — late fees start from day 1 of delay
2. Collect seller's PAN before making any payment — 20% TDS without PAN is a huge burden
3. Save all acknowledgments — challan counterfoil, 26QB acknowledgment, and Form 16B copies
4. Verify in Form 26AS — both buyer and seller should check their Form 26AS/AIS to confirm TDS reflects correctly
5. NRI seller = different rules — if seller is NRI, consult a CA; TDS rates are 20-30% under Section 195 and you need a TAN

Frequently Asked Questions

Do I need a TAN to file Form 26QB?

No. Unlike regular TDS deductions, property buyers do not need a TAN (Tax Deduction and Collection Account Number). Your PAN is sufficient to file Form 26QB and make the payment.

What if the property value is exactly ₹50 lakh?

TDS under Section 194-IA applies only when the consideration exceeds ₹50 lakh. If the value is exactly ₹50 lakh, no TDS is required.

Can TDS be deducted on the stamp duty value instead of sale price?

As per the amended Section 194-IA, TDS is deducted on the sale consideration or stamp duty value, whichever is higher. This was amended to prevent underreporting of property values.

What if I forgot to deduct TDS on property purchase?

You should deduct and deposit the TDS immediately along with interest at 1% per month for the delay. File Form 26QB with the late payment. Consult a CA to minimize penalties.

How does the seller claim TDS credit?

The seller can claim TDS credit while filing their income tax return for the relevant assessment year. The TDS will appear in their Form 26AS/Annual Information Statement (AIS). They need Form 16B from the buyer as proof.

Is TDS applicable on resale of property?

Yes. TDS under Section 194-IA applies to any purchase of immovable property (other than agricultural land) exceeding ₹50 lakh, regardless of whether it is a new or resale property.

What if the seller refuses to share PAN?

You are still legally required to deduct TDS — at the higher rate of 20% if PAN is not available. This makes it in the seller's interest to share their PAN. Without PAN, you cannot complete Form 26QB (PAN is a mandatory field), so practically the transaction may get stuck.

This guide is for informational purposes only and does not constitute tax advice. CitizenNest is an independent platform and is not affiliated with the Income Tax Department or NSDL. Consult a chartered accountant for advice specific to your situation.

Related Guides:

• Property Registration Online — Complete Guide
• Capital Gains Tax on Property — Complete Guide