TDS on Property Transactions

TDS on Property Transactions

🏠 TDS on Property Transactions in India – 2025 Guide for Buyers & Sellers
Buying or selling property in India? Then you must know that TDS (Tax Deducted at Source) is applicable if the transaction value crosses a certain threshold. Most people wrongly assume only sellers have to deal with taxes, but under Section 194-IA of the Income Tax Act, the buyer is responsible for deducting and depositing TDS.
In this blog, we’ll break down the key rules around TDS on property purchases, how to deduct and deposit it, compliance timelines, consequences of default, and how our experts can help you file Form 26QB and generate the TDS certificate (Form 16B) smoothly.

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📌 What Is TDS on Property Purchase?
As per Section 194-IA, 1% TDS must be deducted by the buyer of the property at the time of payment if:
•    The sale value of the property is ₹50 lakh or more
•    The property is immovable (land, building, flat) except agricultural land
✅ The TDS must be deducted on the entire sale consideration, not just the amount above ₹50 lakh.

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🧾 Key Highlights of Section 194-IA
Criteria    Details
Applicable to    Buyer of property
Threshold    Property value ₹50 lakh or more
TDS Rate    1% of sale consideration
PAN Requirement    PAN of both buyer and seller is mandatory
Form for payment    Form 26QB (online)
TDS Certificate    Form 16B
Time Limit to Pay TDS    Within 30 days from the end of the month of payment
📌 If the seller does not provide PAN, TDS @ 20% may be applicable.

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🧠 Common Mistakes by Buyers
Many buyers unknowingly make mistakes such as:
•    Not deducting TDS
•    Paying the full amount to the seller
•    Deducting TDS but not depositing it
•    Failing to issue Form 16B
•    Missing the 30-day deadline
These errors can lead to interest, penalties, and disallowance of the transaction during scrutiny.
✅ We help you deduct, deposit, and file TDS on time with zero compliance issues.

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🏡 How to Deduct & Deposit TDS on Property
Step 1: Deduct TDS
Before making the final payment, deduct 1% of the total consideration.
Step 2: Fill Form 26QB
Visit https://www.tin-nsdl.com or https://www.incometax.gov.in and:
•    Choose e-payment (26QB)
•    Enter buyer and seller details
•    Fill in property details, PANs, amount, and date of payment
Step 3: Make TDS Payment
You can pay via:
•    Net banking
•    Offline at an authorized bank (with a challan)
Step 4: Download Form 16B
After 4–5 days, download Form 16B from the TRACES portal and issue it to the seller.
✅ Our CA experts can complete all steps on your behalf — accurately and promptly.

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🧮 Example Calculation
Let’s say you’re buying a flat for ₹70 lakh.
•    TDS = 1% of ₹70,00,000 = ₹70,000
•    You pay ₹69,30,000 to the seller
•    ₹70,000 is deposited with the government using Form 26QB

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🕒 Due Date & Late Penalties
Compliance    Timeline    Penalty for Delay
Filing Form 26QB    Within 30 days from end of payment month    ₹200 per day (max equal to TDS amount)
Issuing Form 16B    Within 15 days of Form 26QB filing    ₹100 per day (max equal to TDS amount)
Late TDS deposit    Interest @ 1% per month    Additional penalty under Section 271H may apply

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❌ Consequences of Not Complying
•    Buyer may face interest and penalties
•    The seller may face issues in claiming TDS credit
•    Property deal may come under income tax scrutiny
•    Disallowance of cost for the buyer during the capital gains calculation
✅ Don’t risk delays or non-compliance — our service includes Form 26QB filing, Form 16B issuance, and TDS payment tracking.

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💼 Why Choose Us for TDS on Property Transactions?
Whether you're buying a flat, commercial unit, or plot, we help you:
•    ✅ Determine TDS applicability
•    ✅ File Form 26QB online
•    ✅ Pay TDS to the government securely
•    ✅ Generate and deliver Form 16B to the seller
•    ✅ Correct any errors in previous filings (TDS corrections)
📞 Buying or selling a property above ₹50 lakh?
Let our experts handle the TDS compliance end-to-end, so you can focus on your investment.

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🏁 Final Thoughts
TDS on property transactions is mandatory and the responsibility of the buyer, not the seller. Failing to deduct or deposit TDS can lead to heavy penalties and legal hassles. By understanding your obligations and filing correctly, you ensure a smooth and legally compliant property deal.
✅ File your TDS on property transactions with expert help today — safe, fast, and error-free.