TDS on property purchase
last updated 2026-07-21
Under Section 194-IA, when you buy immovable property (other than agricultural land) for ₹50 lakh or more, you — the buyer — must deduct 1% TDS from the payment, deposit it, and file Form 26QB. You need the seller's PAN and your own; no TAN is required. It applies to an auction purchase too.
The rule in short
- Rate: 1% of the sale consideration or the stamp-duty (guideline) value, whichever is higher.
- Threshold: the property value must be ₹50 lakh or more. Below that, no TDS.
- Who deducts: the buyer, from the amount paid to the seller.
- Excluded: agricultural land.
How you pay and file it
You deposit the deducted amount and file Form 26QB — an online challan-cum-statement — within seven days of the end of the month in which the deduction was made. You need the buyer's and the seller's PAN (no TAN is required). If the seller does not provide a PAN, TDS is deducted at a much higher rate. After depositing, you download Form 16B and give it to the seller as proof.
The bank-auction angle
Where a SARFAESI purchase crosses the ₹50 lakh threshold, the same obligation applies — the "seller" for TDS purposes is worked out per the transaction, so confirm how the bank handles it and who the payment is made to before you complete. It is a compliance step, not an extra tax on you (it counts towards the seller's tax), but missing it carries interest and penalties. Factor it into your post-win checklist alongside stamp duty and registration. This is general information, not tax advice — confirm your case with a professional and the Income Tax Department's portal.
Frequently asked questions
When is the TDS due after buying a property?
You must deposit the deducted 1% and file Form 26QB within seven days from the end of the month in which the deduction (payment to the seller) was made. Late filing attracts interest and a penalty, so don't leave it.
Who deducts TDS on a property purchase?
The buyer. Under Section 194-IA you deduct 1% from the payment to the seller when the property value is ₹50 lakh or more, deposit it, and file Form 26QB. You need PAN but not a TAN.
Does TDS apply to a bank auction property?
Yes, where the purchase is ₹50 lakh or more and the property is not agricultural land. Confirm with the bank how it is handled and to whom payment is made before completing.
What if the seller has no PAN?
Then TDS must be deducted at a much higher rate (20%), and the seller cannot claim credit for it. Always obtain the seller's PAN.
Related terms
Sources
Rates, fees and procedures change — confirm the current position on the official portals below before you act.