Is TDS on the whole amount or only above 50 lakh?

On the whole amount. If the property value is Rs 50 lakh or more, 1% TDS applies to the entire consideration, not just the part above Rs 50 lakh. For a Rs 70 lakh property, TDS is 1% of Rs 70 lakh, i.e. Rs 70,000.

What is Form 26QB and Form 16B?

Form 26QB is the online challan-cum-statement the buyer files to pay the 1% TDS, generally within 30 days from the end of the month of deduction. Form 16B is the TDS certificate the buyer then downloads and gives to the seller as proof that tax was deducted and deposited.

Does the buyer need a TAN for property TDS?

No. For Section 194IA, the buyer does not need a TAN and can deposit the TDS using their PAN through Form 26QB. Both the buyer's and the seller's PAN are required.

What if the seller does not give a PAN?

If the seller does not provide a valid PAN, the TDS rate rises from 1% to 20%. Always collect the seller's PAN before completing the transaction.

Finance Guided: TDS on Property Sale 2026 — Section 194IA, 1% Rule & Form 26QB

Q: Who deducts TDS on a property sale?

The buyer deducts the TDS, not the seller. Under Section 194IA, when a buyer purchases an immovable property (other than agricultural land) worth Rs 50 lakh or more, the buyer must deduct 1% TDS from the payment to the seller and deposit it with the government using Form 26QB.

Verified July 2026 · General information, not tax advice — property transactions vary, so confirm your case with a professional.

Quick answer: When you buy an immovable property (not agricultural land) worth ₹50 lakh or more, you — the buyer — must deduct 1% TDS from the payment to the seller and deposit it with the government using Form 26QB, generally within 30 days from the end of the month of deduction. The 1% applies to the entire value, not just the part above ₹50 lakh. You don't need a TAN (use your PAN), and afterwards you give the seller Form 16B as proof. No PAN from the seller means 20% TDS.

Key takeaways

The buyer deducts TDS, not the seller (Section 194IA).
Applies to property ₹50 lakh and above (not agricultural land).
1% on the whole amount — for ₹70 lakh, TDS is ₹70,000.
Pay via Form 26QB (~30 days from month-end); no TAN needed.
Give the seller Form 16B as the TDS certificate.
Seller has no PAN → 20% TDS.
NRI seller is different — Section 195, higher TDS.

The rule most home-buyers don't know they must follow

Here's a duty that surprises many first-time buyers: when you purchase a property, you are responsible for deducting and depositing tax on the seller's behalf. Under Section 194IA, if the property's value is ₹50 lakh or more, the buyer must withhold 1% of the payment as TDS and pay it to the government, giving only the remaining 99% to the seller. Miss this, and it's the buyer — not the seller — who faces interest and penalty. So knowing the process protects you.

When does it apply?

The property is an immovable property — a flat, house, plot or commercial unit — other than agricultural land.
The consideration (or the stamp-duty value) is ₹50 lakh or more.
It applies whether you pay in one go or in instalments — you deduct 1% from each instalment once the total crosses ₹50 lakh.

1% on the whole amount — not just the excess

This is the point people get wrong. The ₹50 lakh is a trigger, not an exemption. Once the value reaches ₹50 lakh, the 1% is charged on the entire consideration:

Property value	TDS (1%)
₹48 lakh	Nil (below ₹50 lakh)
₹50 lakh	₹50,000 (on the full ₹50 lakh)
₹70 lakh	₹70,000 (on the full ₹70 lakh)
₹1.2 crore	₹1,20,000

Also note TDS is on the higher of the sale value or the stamp-duty (guideline) value — the same "higher of" logic used for stamp duty. If you're in Tamil Nadu, our guideline value guide explains how to check that figure.

How to pay — Form 26QB step by step

Collect the seller's PAN and your own PAN — both are mandatory.
Deduct 1% from the payment (or each instalment) to the seller.
File Form 26QB online — it's a combined statement-cum-challan — with the property, buyer and seller details, and pay the TDS electronically.
Do this generally within 30 days from the end of the month in which you deducted.
Download Form 16B from the TRACES portal and hand it to the seller as the TDS certificate.

You do not need a TAN (Tax Deduction Account Number) for this — the whole point of Section 194IA is that an ordinary individual buyer can comply using just their PAN.

Multiple buyers or sellers

Joint transactions need extra care. If there are two buyers and one seller, or one buyer and joint sellers, a separate Form 26QB is filed for each buyer-seller combination, splitting the consideration accordingly. Many people file one 26QB for a jointly-owned purchase and get a mismatch notice later — so map out each PAN pair before you file.

The two costly mistakes

Seller without a valid PAN → 20% TDS. If the seller can't or won't give a PAN, the rate jumps from 1% to 20%. Always verify the seller's PAN before the deal closes.
NRI seller → this is not Section 194IA. If the seller is a non-resident, TDS is governed by Section 195, usually at a much higher rate on the capital gains (with surcharge/cess), and the buyer does need a TAN. Treating an NRI sale as a simple 1% deduction is a serious error — get professional help for NRI-seller transactions.

What the TDS means for each side

For the buyer, the 1% isn't an extra cost — it's part of the price, just routed to the government instead of the seller. Your job is purely compliance: deduct, deposit, and issue Form 16B. For the seller, the 1% is advance tax credit against their own tax on the sale; it shows in their Form 26AS, and they adjust it when computing capital-gains tax (or claim a refund if their actual liability is lower, for example after a Section 54 exemption).

A quick worked example

Arun buys a flat from a resident seller for ₹80 lakh. He collects the seller's PAN, deducts 1% = ₹80,000, and pays the seller ₹79,20,000. Within 30 days of the month-end he files Form 26QB, pays the ₹80,000, downloads Form 16B and hands it to the seller. The seller sees ₹80,000 in their 26AS and sets it off against the capital-gains tax on the sale. Clean, and no penalty for Arun.

Penalties for getting it wrong

If the buyer fails to deduct or deposit the TDS, or files Form 26QB late, there can be interest on the shortfall and a late-filing fee, plus a penalty in serious cases. Because the obligation sits on the buyer, it's genuinely worth doing on time — build the 26QB filing into your closing checklist alongside registration and stamp duty.

Related guides

Buying property? Pair this with our guideline value guide, the stamp duty calculator, and the seller-side Section 54 capital-gains exemption.

Frequently asked questions

Who deducts TDS on a property sale?

The buyer, under Section 194IA — 1% on properties ₹50 lakh and above.

Is TDS on the whole amount?

Yes — 1% on the entire value once it's ₹50 lakh+, not just the excess.

What are Form 26QB and 16B?

26QB is the challan-cum-statement to pay the TDS; 16B is the certificate the buyer gives the seller.

Does the buyer need a TAN?

No — use your PAN. Both buyer's and seller's PAN are required.

What if the seller has no PAN?

TDS rises to 20%. And if the seller is an NRI, Section 195 applies (higher TDS, TAN needed).

About the author. Written by Dinesh Kumar S, Chennai — B.Sc. Mathematics, M.Sc. IT — who runs Finance Guided and ComplyKraft to explain Indian money rules in plain language.

Disclaimer: General information, verified July 2026. Property-TDS rules and timelines depend on your transaction (resident vs NRI seller, joint owners) — confirm with a tax professional before you close.