A buyer of non-rural-agricultural immovable property from a resident seller deducts 1% on the higher of sale consideration or stamp-duty value when either…
A buyer of non-rural-agricultural immovable property from a resident seller deducts 1% on the higher of sale consideration or stamp-duty value when either reaches ₹50 lakh. Aggregate consideration across multiple buyers and sellers is tested for the property.
Legal or Computational Framework
Governing rule
Legacy section 194-IA governs AY 2026-27 transactions; the 2025 Act consolidates withholding for later tax years. Incidental charges such as parking, club membership and facility fees can form part of consideration. TAN is not required; Form 26QB and Form 16B are used.
Correct workflow
Confirm seller residence; aggregate property consideration and stamp value; calculate 1%; deduct at payment or credit including instalments; file Form 26QB within the prescribed period; issue Form 16B; reconcile seller credit.
Step-by-step method
- Confirm seller residence.
- aggregate property consideration and stamp value.
- calculate 1%.
- deduct at payment or credit including instalments.
- file Form 26QB within the prescribed period.
- issue Form 16B.
- reconcile seller credit.
Worked example
Sale price ₹48 lakh and stamp-duty value ₹54 lakh: TDS applies because stamp value reaches ₹50 lakh, and the base is ₹54 lakh under the current rule.
The example is an audit trail, not a substitute for the user's facts. Change one input—residence, payment date, tax year, asset, return form, GST status, employer category or supporting document—and the result can change.
Edge cases
- NRI seller uses the non-resident route, not 1%: record the factual and legal conclusion in the working paper.
- Multiple transferees do not split the threshold: record the factual and legal conclusion in the working paper.
- Under-construction instalments require deduction timing: record the factual and legal conclusion in the working paper.
- Incidental charges can increase consideration: record the factual and legal conclusion in the working paper.
- PAN failure can trigger higher deduction: record the factual and legal conclusion in the working paper.
What Generic Pages Miss
- Checking only agreement value.
- Splitting between joint buyers.
- Using 26QB for an NRI seller.
- Deducting only at registration.
- Omitting parking or club charges.
Generic pages often confuse gross income with net receipt, TDS with final tax, GST turnover with income-tax turnover or a portal value with legal eligibility. Finin2min should show why an amount is accepted, deferred, reversed, rejected or carried forward.
Practical Documentation Checklist
- Sale agreement
- Seller residence/PAN
- Stamp value
- Payment schedule
- Form 26QB challans
- Form 16B and Form 26AS
For the complete rules on this topic, see the core guide: TDS Sections 192-194T Consolidated: Section 392 & 393 Mapping.
See the broader Income-tax Act 2025 study guide hub for related rules and calculators on this topic.
Finin2min Summary
A buyer of non-rural-agricultural immovable property from a resident seller deducts 1% on the higher of sale consideration or stamp-duty value when either reaches ₹50 lakh. Aggregate consideration across multiple buyers and sellers is tested for the property.
Finin2min rule: classify the legal event, calculate from source records and show every adjustment.
Frequently Asked Questions
What is the direct answer for TDS on property purchase ₹50 lakh? ▼
A buyer of non-rural-agricultural immovable property from a resident seller deducts 1% on the higher of sale consideration or stamp-duty value when either reaches ₹50 lakh. Aggregate consideration across multiple buyers and sellers is tested for the property.
Which law or period applies? ▼
Legacy section 194-IA governs AY 2026-27 transactions; the 2025 Act consolidates withholding for later tax years. Incidental charges such as parking, club membership and facility fees can form part of consideration. TAN is not required; Form 26QB and Form 16B are used. AY 2026–27 remains under the Income-tax Act, 1961; income from 1 April 2026 is governed by the Income-tax Act, 2025 where relevant.
What calculation or workflow should be followed? ▼
Confirm seller residence; aggregate property consideration and stamp value; calculate 1%; deduct at payment or credit including instalments; file Form 26QB within the prescribed period; issue Form 16B; reconcile seller credit.
What does the example demonstrate? ▼
Sale price ₹48 lakh and stamp-duty value ₹54 lakh: TDS applies because stamp value reaches ₹50 lakh, and the base is ₹54 lakh under the current rule.
Which records should be retained? ▼
Keep sale agreement, seller residence/PAN, stamp value, payment schedule, Form 26QB challans so the result can be reproduced and defended.
What is the most common error? ▼
The most frequent errors are checking only agreement value and splitting between joint buyers.