TDS on Property Purchase: 1%, ₹50 Lakh and Form 26QB
Reviewed by CA Nikhil Gupta · Last reviewed 2 August 2026
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.
For the connected rule or filing step, see Property Purchase TDS Calculator — Form 141 / Section 393(1).
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
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Income Tax
- Official starting point
- www.incometax.gov.in
Page source links
Primary sources & related provisions
Statutory provisions referenced in this guide: