Quick Answer: Under Section 194IA, a buyer purchasing immovable property (other than agricultural land) valued at ₹50 lakh or more must deduct TDS at 1% of the sale consideration at the time of payment. The buyer deposits it using Form 26QB within 30 days from the end of the month of deduction. Non-compliance attracts interest and penalty.
Section 194IA — TDS on Property Purchase
When you buy an immovable property worth ₹50 lakh or more in India, you are required by law (Section 194IA) to deduct 1% TDS from the amount payable to the seller. This TDS must be deposited with the government via Form 26QB. Non-compliance attracts interest and penalties.
Property TDS Compliance Steps
- Check threshold: If property value ≥ ₹50 lakh, TDS is mandatory
- Deduct TDS: 1% of the sale price (or stamp duty value, whichever is higher from FY 2023-24)
- File Form 26QB: Online on TRACES or IT portal (no TAN needed)
- Pay TDS: Within 30 days from the end of the month of deduction
- Issue Form 16B: Download from TRACES and give to seller within 15 days of filing
Frequently Asked Questions
Not deducting/depositing TDS on property attracts: Interest at 1.5%/month (Section 201(1A)), Penalty equal to TDS not deducted (Section 271C), and the property registration may create issues with the seller's income tax records. Registrations are not blocked, but the buyer becomes an "assessee in default."
No. Section 194IA applies only to immovable property other than agricultural land. Agricultural land is exempt from this TDS provision. However, the seller may still have capital gains tax liability on sale of agricultural land.