Form 26QB: TDS on Property Purchase Above ₹50 Lakh
Buying property over ₹50 lakh? You must deduct 1% TDS under Section 194-IA, pay via Form 26QB and issue Form 16B. Process, due date and penalties explained.
Buying a flat, house or commercial property in India for ₹50 lakh or more? The law makes you, the buyer, responsible for deducting tax at source. Miss it and the penalties land on you, not the seller. Here is exactly what Form 26QB is and how to get it right.
The rule: Section 194-IA
Under Section 194-IA, a buyer of immovable property other than agricultural land must deduct 1% TDS on the sale consideration where it is ₹50 lakh or more. The tax is deducted at the time of payment or credit to the seller — including on instalments, proportionately.
Two refinements matter:
- TDS is on the higher of the sale consideration or the stamp-duty value. If the stamp-duty (circle-rate) value exceeds the agreed price, TDS is computed on the higher figure.
- Multiple buyers or sellers: the ₹50 lakh threshold applies to the total consideration for the property, not each person's share. Two buyers splitting a ₹90 lakh flat still deduct TDS — the threshold looks at the whole ₹90 lakh.
No TAN needed — but Form 26QB is mandatory
Unlike other TDS, you do not need a TAN for property TDS. Instead you file Form 26QB, a combined challan-cum-statement, using the buyer's and seller's PAN. Then you issue the seller Form 16B, downloaded from TRACES, as proof of the TDS deducted.
The deadline
Form 26QB must be filed and the TDS deposited within 30 days from the end of the month in which the deduction was made. So a deduction on 10 August is due by 30 September. On instalment purchases, each payment triggers its own deduction and its own 26QB.
The big exception: NRI sellers
If the seller is a non-resident, Section 194-IA and Form 26QB do not apply. TDS is instead deducted under Section 195 — at much higher rates, typically on capital gains with surcharge and cess — and the buyer does need a TAN and files Form 27Q. Buying from an NRI without handling Section 195 correctly is one of the costliest mistakes in property deals. Always confirm the seller's residential status.
Penalties for getting it wrong
| Default | Consequence |
|---|---|
| Late deduction | Interest at 1% per month |
| Late deposit | Interest at 1.5% per month |
| Late filing of 26QB | ₹200 per day under Section 234E, capped at the TDS amount, plus a possible penalty under Section 271H |
Because the liability sits with the buyer, the seller can also withhold registration cooperation if TDS handling delays their Form 16B — so it is in everyone's interest to do it on time.
How CorporateWalla helps
We confirm the seller's residential status (194-IA vs 195), compute TDS on the correct base, file Form 26QB within the deadline, and deliver Form 16B — for resident and NRI transactions alike.
All fees and charges are indicative only and do not constitute a binding offer. Government fees are paid at actuals. Final amounts may vary depending on the volume of work and the complexity involved.
Frequently Asked Questions
Q: Who deducts the TDS — buyer or seller?
A: The buyer. It is the buyer's legal responsibility under Section 194-IA.
Q: Does it apply below ₹50 lakh?
A: No. The 1% TDS applies only where the consideration, or stamp-duty value, is ₹50 lakh or more.
Q: Do I need a TAN for Form 26QB?
A: No — for a resident seller you use PAN and file Form 26QB. But if the seller is an NRI, Section 195 applies and you do need a TAN.
Q: When is Form 26QB due?
A: Within 30 days from the end of the month in which the TDS was deducted.