Section 194-IA of the Income Tax Act requires buyers to deduct 1% TDS on property purchases of ₹50 lakh and above. This is the buyer's obligation — not the seller's, not the agent's. Many buyers miss this and face penalties. This calculator shows exactly how much to deduct and when.
TDS Calculator — Section 194-IA
Applicable on immovable property (other than agricultural land) with value ≥ ₹50 lakh
TDS rate: 1% of total sale consideration. If the seller does not have a PAN, TDS is 20%. TDS must be deposited within 30 days of month-end using Form 26QB at tin.nsdl.com.
TDS to deduct
—
Step-by-Step: How to Pay TDS on Property
1
Deduct TDS from seller payment
When making payment to the seller, deduct 1% of each payment (not just the final payment). If paying ₹75 lakh in 3 instalments, deduct 1% = ₹25,000 from each instalment. Pay the seller the remaining 99%.
2
File Form 26QB online
Go to tin.nsdl.com → TDS on Sale of Property → Form 26QB. Fill in buyer and seller details (PAN mandatory for both), property details, payment date and amount, and TDS deducted. Submit within 30 days of the end of the month of payment.
3
Pay the TDS amount
After submitting Form 26QB, pay the TDS using the generated challan via net banking or at authorised bank branches. Keep the acknowledgment — you will need it to download Form 16B.
4
Download Form 16B and give to seller
After TDS is reflected in TRACES (typically within 5-7 working days of payment), download Form 16B from traces.gov.in. Provide this to the seller — it is the TDS certificate confirming deduction. The seller uses this for their tax return.
Common Mistakes Buyers Make
Not deducting on advance payments: TDS applies to every payment including token amounts and advance if the total property value is ≥₹50 lakh. Waiting until the final payment to deduct all TDS is incorrect.
Paying full amount to seller without TDS deduction: If you pay the seller 100% and then try to deposit TDS separately from your own funds, you have not correctly "deducted" TDS — technically you must pay the seller 99% and deposit 1% to the government.
Not filing Form 26QB before registration: The Sub-Registrar requires proof of TDS payment (Form 26QB acknowledgment) before registering properties above ₹50 lakh. Not having this can block your registration.
Wrong PAN: If PAN details are entered incorrectly in Form 26QB, the seller cannot get credit for the TDS. Both buyer's and seller's PANs must be exact.
Missing the 30-day deadline: TDS must be deposited within 30 days from the end of the month of deduction. Delay attracts interest at 1.5% per month plus potential penalty.
TDS When Buying from an NRI Seller
When buying property from an NRI (Non-Resident Indian), the TDS rules are significantly different and much more complex. Section 195 applies instead of 194-IA, and the TDS rate is 20-30% depending on the type of capital gain (long-term or short-term). The NRI seller can apply for a lower deduction certificate from the Income Tax Department. Buying from an NRI requires careful guidance — engage a chartered accountant experienced in NRI transactions before proceeding.
TDS on Property Is Tested in MahaRERA Exam
Section 194-IA, the 1% rate, and the Form 26QB process appear in the Sales and Documentation section of the IBPS exam.
Free daily challenge · Full access ₹499 for 3 months
Frequently Asked Questions
Do I need a TAN (Tax Deduction Account Number) to deduct TDS on property?
No. Section 194-IA specifically exempts buyers from the requirement to obtain a TAN for property TDS. You use your PAN to file Form 26QB. This is a special provision making property TDS simpler than other TDS deductions that require TAN registration.
What if there are multiple sellers for the same property?
If the property is jointly owned by multiple sellers, TDS must be deducted separately for each seller's share. A separate Form 26QB must be filed for each seller. For example, if two co-owners each own 50% of a ₹1 crore property, file Form 26QB separately for each — ₹50,000 TDS for each seller's ₹50 lakh share.
Is TDS applicable on GST component of under-construction property?
No. TDS under Section 194-IA applies only on the sale consideration of the property — not on the GST component. If you are paying ₹70 lakh as property price plus ₹3.5 lakh as GST, TDS is calculated only on ₹70 lakh. This was clarified by a CBDT circular to prevent double taxation.
What if the seller refuses to let me deduct TDS?
This situation sometimes arises — sellers want the full consideration. The legal position is clear: TDS deduction is the buyer's statutory obligation, not subject to the seller's consent. If you pay the full amount without deducting TDS, you become liable for the TDS amount plus interest and penalty. Do not let pressure from the seller cause you to skip this legal requirement. The seller can recover the TDS from their income tax refund if they have paid excess tax.
Disclaimer: TDS rules are based on the Income Tax Act as of April 2025. NRI seller transactions have different requirements not covered by this calculator. Consult a CA for complex situations. RERAExam is not a tax advisory service.