# TDS on Property Purchase (1%) & Buyer Compliance

> A buyer of immovable property (other than agricultural land) from a resident seller must deduct TDS at 1% when the consideration is ₹50 lakh or more, computed on the higher of the price and the stamp-duty value, and pay it with the challan-cum-statement Form 26QB (Form 141 under the Income-tax Rules, 2026) — no TAN is needed. The buyer then gives the seller Form 16B. If the seller is an NRI, different TDS rules apply under Section 195.

Practice: Property & Capital Gains Tax — https://www.industax.com/services/property-tax/

The ₹50 lakh threshold is tested on the total consideration, even when there are several buyers or sellers — each buyer deducts on their share. Payments in instalments (common for under-construction flats) need TDS on each instalment.

Buying from an NRI is very different: TDS is 12.5% (long-term) or 30% (short-term) plus surcharge and cess, on the whole price unless the seller provides a lower-deduction certificate, and the buyer needs a TAN and must file a quarterly non-resident TDS return.

## Key facts

| Item | Detail |
| --- | --- |
| Rate (resident seller) | 1% when consideration ≥ ₹50 lakh |
| Base | Higher of consideration and stamp-duty value |
| Form | 26QB (Form 141 from 1 April 2026); no TAN required |
| Certificate to seller | Form 16B |
| NRI seller | Section 195 — 12.5%/30% + surcharge + cess; TAN required |

## Who needs this

- Home buyers purchasing property worth ₹50 lakh+
- Buyers paying in instalments to builders
- Anyone buying from an NRI seller

## What's included

- TDS computation per buyer and instalment
- Form 26QB / 141 filing
- Form 16B download
- NRI-seller TDS and TAN compliance

## Documents

- Sale agreement and payment schedule
- PAN of buyers and sellers
- Stamp-duty value

## Process

1. **Compute** — TDS per buyer and payment computed.
2. **Pay** — Challan-cum-statement filed and paid.
3. **Certify** — Form 16B issued to the seller.

## Also covers

- **Property purchase tax** — TDS, stamp duty and registration responsibilities of the buyer.

## FAQs

### Does a buyer need a TAN for 1% property TDS?

No, when buying from a resident seller — the PAN-based Form 26QB / 141 is used. Buying from an NRI requires a TAN.

### Is TDS deducted on the stamp-duty value or the price?

On the higher of the two.

### What if TDS was not deducted?

The buyer is liable for the tax, interest and possible penalties, so it should be paid with interest as soon as the error is noticed.

## Official sources

- TIN-NSDL / e-Pay Tax (property TDS): https://www.incometax.gov.in/
- Income Tax e-Filing portal: https://www.incometax.gov.in/

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Canonical page: https://www.industax.com/services/property-tax/property-purchase-tds
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.