TDS on purchase of property is 1% of the price, deducted by the buyer under section 194IA when a flat, house, shop or non-agricultural plot is bought from a resident seller for ₹50 lakh or more. The buyer pays it through Form 26QB on the e-filing portal; no TAN is needed.
If the seller is a non-resident, the ₹50 lakh limit and the 1% rate do not apply. The buyer deducts tax on the capital gain under section 195, at much higher rates. These are the FY 2025-26 rules under the 1961 Act. From tax year 2026-27 property TDS is listed in section 393 of the 2025 Act. Rent on a property is a separate topic: see TDS on rent. Every other rate is in the TDS rate chart, and the general idea is in what TDS means.
Quick facts
Rate
1% of the higher of price and stamp duty valueThreshold
₹50 lakh or moreWho deducts
The buyer, at each paymentForm
26QB, within 30 days of the month-endCertificate
Form 16B from TRACESSeller without PAN
20%NRI seller
Section 195, tax on the gain, buyer needs TAN for FY 2025-26
TDS on purchase of property: rate and limit
| Point | Resident seller (194IA) | Non-resident seller (195) |
|---|---|---|
| Threshold | ₹50 lakh or more | None |
| Rate | 1% | Rate on capital gains: 12.5% for long-term gains plus surcharge and 4% cess; higher for short-term |
| Base | Higher of price and stamp duty value | Sale price, unless the seller gets a lower deduction certificate |
| Buyer needs TAN | No, PAN is enough | Yes |
| Form | 26QB | 27Q |
| Certificate | 16B | 16A |
Rural agricultural land is outside 194IA. Payments for parking, club membership and other charges that form part of the deal count as price. The 1% is cut from every instalment once the total deal is ₹50 lakh or more, not only from the last one.
Worked examples of property TDS
Stamp duty value above the price. Kavita buys a flat for ₹80,00,000. The stamp duty value is ₹85,00,000. TDS is 1% of the higher figure, ₹85,000. She pays the seller ₹79,15,000 and deposits ₹85,000 through Form 26QB.
Joint buyers. A couple buys a ₹60,00,000 flat in equal shares. Each pays ₹30,00,000. From 1 October 2024 the test uses the total deal value, so TDS applies even though each share is below ₹50 lakh. Each buyer deducts 1% on their share, ₹30,000, and files a separate Form 26QB. With two sellers, each buyer files one form per seller for the share paid to that seller.
Paid in stages. An under-construction flat costs ₹72,00,000, paid in four stages of ₹18,00,000. The buyer deducts ₹18,000 at each stage, ₹72,000 in all.
How to pay TDS on property purchase through Form 26QB
- Log in with the buyer's PAN on the e-filing portal.
- Under e-File, choose e-Pay Tax, then select New Payment.
- Pick 26QB (TDS on sale of property) and fill in buyer and seller PAN, address, property details, date of agreement, total price, stamp duty value and the amount paid now.
- Check the TDS amount, then pay through net banking or another mode offered.
- Save the challan receipt with its acknowledgement number.
- After a few days, log in to TRACES with your PAN and download Form 16B; give it to the seller within 15 days of the 26QB due date.
Form 26QB must be filed no later than 30 days after the close of the month of deduction. A deduction on 12 September is due by 30 October.
Buying from an NRI: section 195
When the seller is a non-resident, the buyer must get a TAN, deduct tax under section 195, deposit it with Challan 281 and file Form 27Q. Tax is worked out on the capital gain at the rates in force, plus surcharge and 4% cess, and many buyers deduct on the full price because they cannot verify the seller's cost. The seller can apply for a lower deduction certificate to cut this down. Our page on TDS on property from an NRI goes through the steps.
Property TDS under the Income-tax Act, 2025
| Item | FY 2025-26 | Tax year 2026-27 |
|---|---|---|
| Resident seller | 194IA, 1% at ₹50 lakh or more | Same rate and limit, listed in section 393 |
| Challan form | Form 26QB | A single challan-cum-statement that replaces 26QB and the related property and rent forms; choose the property option on the portal |
| NRI seller, resident individual buyer | TAN required | Reported changes let resident individual and HUF buyers use PAN instead of TAN from 1 October 2026; check the portal |
A deal registered in March of FY 2025-26 with a stage payment in May falls under the 1961 Act for the March payment and the 2025 Act for the May one.
Penalties and common errors
| Error | Fix |
|---|---|
| TDS on price when stamp duty value is higher | Deduct on the higher figure |
| One 26QB for joint buyers | Each buyer files separately for each seller |
| Filing 26QB late | Fee of ₹200 a day under 234E, capped at the TDS, plus interest of 1.5% a month for late payment |
| Wrong seller PAN | Request a correction on TRACES; the seller cannot claim credit until it is fixed |
| Using 26QB for an NRI seller | Use TAN, Challan 281 and Form 27Q |
This page sets out the general property TDS rules in India and is not advice on your purchase. Laws and forms change, so before you pay, get your own case checked by a chartered accountant.
Sources we checked
- Income-tax Act, 1961, section 194IA
- Income-tax Act, 1961, section 195
- Income-tax Act, 2025, section 393
- Income-tax Rules, 1962, rule 31A
Frequently asked questions
Which section covers TDS on property purchase above 50 lakhs?
Section 194IA. On a sale of immovable property by a resident, the buyer deducts 1% under section 194IA when the price or stamp duty value is ₹50 lakh or more. It applies to the whole amount, not just the part above ₹50 lakh.
How to pay TDS on purchase of property online?
On the e-filing portal, open e-Pay Tax and use the 26QB option. Fill in the deal details and pay; then download Form 16B from TRACES for the seller.
Does the buyer need a TAN for TDS on property?
Not when the seller is resident; PAN is enough for Form 26QB. When the seller is an NRI, the buyer needs a TAN for FY 2025-26 deals.
What is the TDS rate on purchase of property from an NRI under section 195?
There is no flat 1%. Tax is deducted on the capital gain at the applicable rate, such as 12.5% for long-term gains, plus surcharge and 4% cess, unless the seller holds a certificate for lower deduction.
Is TDS deducted on land purchase?
Yes. TDS on purchase of immovable property covers non-agricultural land of ₹50 lakh or more. Agricultural land in a rural area is outside section 194IA.