1Do I have to deduct TDS when buying property?
Yes — if the property is Rs 50 lakh or more, the buyer must deduct 1% TDS under Section 194IA and pay the seller the balance, depositing the TDS via Form 26QB.
When you buy property above a threshold, the law makes you — the buyer — responsible for deducting and depositing TDS. Missing it creates problems at registration and later. Here's how Section 194IA works.
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-14
Quick answer
Buying property worth Rs 50 lakh or more? You must deduct 1% TDS from the payment to the seller. Here's how it works.
Under Section 194IA, when you buy immovable property (other than agricultural land) for Rs 50 lakh or more, you must deduct TDS at 1% of the sale consideration and pay the seller the balance. The responsibility is on the buyer, not the seller.
The rule applies where the consideration (or stamp-duty value) is Rs 50 lakh or more. At or above that, 1% TDS applies on the whole amount; below it, no 194IA TDS. For instalment payments on an under-construction property, the TDS applies to each instalment once the threshold property crosses Rs 50 lakh.
You deposit the TDS using Form 26QB, a challan-cum-statement, within the prescribed time of the payment. After depositing, you issue the seller a TDS certificate (Form 16B). Doing this on time avoids interest and late fees.
If the seller doesn't provide a PAN, TDS is deducted at a higher rate. Importantly, 194IA's 1% applies to resident sellers; if the seller is an NRI, a different section and much higher TDS (on the capital gain) applies — so check the seller's residential status first.
For the seller, the 1% TDS is a prepayment that appears in their 26AS and is claimed against their tax on the sale. So both sides should ensure the TDS is deposited correctly with the right PANs.
Yes — if the property is Rs 50 lakh or more, the buyer must deduct 1% TDS under Section 194IA and pay the seller the balance, depositing the TDS via Form 26QB.
1% of the sale consideration for a resident seller, where the value is Rs 50 lakh or more. If the seller has no PAN, it's higher; if the seller is an NRI, a different section with much higher TDS applies.
Using Form 26QB (a challan-cum-statement) within the prescribed time , then issue the seller Form 16B. Doing it on time avoids interest and late fees.
Buying property? Write to the firm and we'll handle the 194IA TDS, Form 26QB and the seller's status correctly.