Quick answer
Do I need to deduct TDS when buying property?
Yes, if the property costs ₹50 lakh or more and the seller is a resident: deduct 1% and pay it through Form 26QB (now Form 141) within 30 days from the end of the month. Buying from an NRI needs TDS at much higher rates and a TAN.
If you buy immovable property from a resident seller and the total consideration is ₹50 lakh or more, you must deduct 1% as TDS before paying the seller, and deposit it with the government within 30 days from the end of the month in which you deducted it.
Why this catches people off guard
Most first-time buyers assume TDS is the seller's or the bank's responsibility. It is neither. The law places the responsibility on whoever is paying, which means you.
What you need to do
- Get the seller's PAN before payment
- Calculate 1% of the sale value, or of the stamp duty value if that is higher
- Pay through Form 26QB (Form 141 from April 2026) on the Income Tax e-filing portal (e-Pay Tax). No TAN is needed
- Download Form 16B from the TDS portal and give it to the seller within 15 days of the due date for Form 26QB
Form 26QB takes about 20 minutes if you have the seller's PAN handy, and the payment is made through net banking at the same time.
Buying from an NRI? The 1% rule does not apply. TDS is on the capital gain at much higher rates, and you need a TAN. See our NRI property sale page.
What it costs if you miss it
Interest at 1% per month for deducting late, plus 1.5% per month for paying late after deducting, a late fee of ₹200 a day for filing Form 26QB late, and a possible penalty up to the amount of TDS. For a ₹1 crore property, this adds up quickly.
From 1 April 2026, the Income-tax Act, 2025 applies. The 1% rule continues, but section and form numbers have changed: Form 26QB is now Form 141. Ask us if you are unsure which form to use.
We handle these filings for clients as a flat-fee service. Sellers hate chasing this paperwork afterwards, and a missing TDS certificate can hold up the sale.
Need help with this?
Our tds return filing service covers exactly this. Free first consultation, and a clear quote before any work starts.
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