TDS on Property Purchase u/s 194IA: Form 26QB Filing Guide 2026

Section 194IA of the Income Tax Act, 1961 requires the buyer of immovable property to deduct TDS at the time of payment to the seller — provided the total consideration exceeds ₹50 lakh. Introduced in 2013, this provision brings large residential and commercial property transactions under the tax net even without a Tax Deduction Account Number (TAN). For CA firms advising clients on property purchases, understanding the mechanics, timelines and pitfalls of Section 194IA is non-negotiable.

Who Must Deduct TDS Under Section 194IA?

Any person — individual, HUF, company or firm — who pays consideration for the purchase of immovable property (land, building, or part of a building) must deduct TDS if:

• The total consideration is ₹50 lakh or more, and
• The property is not agricultural land.

The threshold applies to the total deal value, not to individual instalment amounts. Even if a buyer pays in multiple construction-linked instalments, TDS must be deducted on each payment once the aggregate consideration crosses ₹50 lakh.

Transactions Excluded from Section 194IA

Section 194IA does not apply to:

• Rural agricultural land as defined under Section 2(14) of the Income Tax Act
• Compulsory acquisition of property by the government
• Transactions where the seller is a non-resident (governed instead by Section 195 read with FEMA)

TDS Rate and Calculation Under Section 194IA

The deduction rate is 1% of the sale consideration. Following an amendment effective July 2022, TDS is now deducted on whichever is higher — the agreed sale consideration or the stamp duty value — to curb undervaluation of property transactions.

Worked Example

Ms. Preethi purchases a flat in Hyderabad for ₹72,00,000. The stamp duty value (circle rate) is ₹76,00,000. Since the stamp duty value is higher:

• TDS = 1% × ₹76,00,000 = ₹76,000

Ms. Preethi deducts ₹76,000 from the final payment to the seller and deposits it with the government via Form 26QB.

Critical point: If the seller does not furnish their PAN, the TDS rate jumps to 20% under Section 206AA. Always collect and verify the seller's PAN before any payment is made.

Filing Form 26QB: Step-by-Step Process

Form 26QB is the challan-cum-statement for TDS under Section 194IA. It is filed entirely online through the TIN-NSDL portal — no TAN is needed, only the buyer's PAN.

Step 1: Access the TIN-NSDL Portal

Go to tin.tin.nsdl.com and select TDS on Property (Form 26QB). Choose the correct assessment year and financial year.

Step 2: Enter Buyer and Seller Details

Fill in:

• Buyer's and seller's PAN, name and address
• Property type (residential / commercial / land) and full address
• Total consideration amount and stamp duty value

Step 3: Enter Instalment Payment Details

Enter the amount being paid in the current transaction. The portal auto-calculates TDS at 1% on the higher of consideration or stamp duty value. Verify the TDS amount before proceeding.

Step 4: Make Payment

Choose net banking (listed banks on NSDL) or generate a challan and deposit at the bank within 10 days. After successful payment, the portal generates a Unique Acknowledgement Number (UAN).

Step 5: Download Acknowledgement

Download and save the Form 26QB acknowledgement immediately — the UAN is required to generate Form 16B for the seller.

Due Dates: Deposit and Form 16B Issuance

TDS deducted under Section 194IA must be deposited within 30 days from the end of the month in which the deduction is made.

After depositing, the buyer must issue Form 16B (TDS certificate) to the seller within 15 days of the due date for furnishing Form 26QB. Form 16B is downloaded from the TRACES portal:

1. 1Log in to traces.gov.in using the buyer's PAN
2. 2Navigate to Downloads → Form 16B
3. 3Enter the UAN and submit the request
4. 4Download the certificate once processed (usually within 24–48 hours)

The seller presents Form 16B when filing their income tax return to claim credit for the TDS deducted.

Consequences of Non-Compliance

Failing to deduct or deposit TDS under Section 194IA carries serious consequences:

• Interest u/s 201(1A): 1% per month from the date TDS was deductible to the date of actual deduction; 1.5% per month from date of deduction to date of deposit
• Penalty u/s 271C: Equal to the amount of TDS not deducted or deposited
• Prosecution u/s 276B: In cases of wilful default, rigorous imprisonment of 3 months to 7 years plus fine

The buyer is also treated as an assessee-in-default, making them personally liable for the TDS shortfall plus accumulated interest — often a larger sum than the original TDS itself.

Common Mistakes CA Firms Must Catch

1. 1Ignoring stamp duty value: Post-July 2022, TDS must be on the higher of consideration or stamp duty value. Buyers who calculate TDS only on agreed price underdeduct and attract interest.
2. 2Missing builder instalments: Buyers assume developers handle TDS on construction-linked plans — they do not. The buyer is always the deductor under Section 194IA.
3. 3NRI sellers: Section 194IA does not apply when the seller is a non-resident; Section 195 applies with higher applicable rates and mandatory TAN.
4. 4Joint purchases: Where two co-buyers purchase one property, each must file a separate Form 26QB for their proportionate share of consideration.
5. 5Forgetting Form 16B: Delay in issuing Form 16B creates problems for the seller's ITR filing and can lead to disputes between buyer and seller.
6. 6Wrong assessment year: Filing Form 26QB for the wrong AY is a common data-entry error that requires a correction request, causing delays.

How corpus Helps

corpus automates the TDS compliance workflow for CA firms that handle multiple property transactions across their client portfolio:

• Client-wise TDS due date tracker surfaces upcoming Form 26QB deadlines and sends email and in-app reminders before the 30-day window closes
• Document vault stores PAN confirmations, sale agreements, stamped receipts and Form 16B certificates in a single organised client folder
• Instalment payment scheduler maps construction-linked payment milestones against TDS deduction obligations, so no payment slips through
• Compliance calendar consolidates Form 26QB due dates alongside GSTR-3B, quarterly TDS returns and advance tax dates in one dashboard

CA firms managing property transactions for 10 or more clients monthly report saving 3–4 hours per week by centralising TDS tracking on corpus instead of spreadsheets.

Conclusion

Section 194IA is deceptively simple on the surface — 1% TDS on property above ₹50 lakh — but the post-2022 stamp duty value comparison, instalment-level deductions, joint-buyer rules and NRI carve-outs make it a minefield for buyers and their advisors. Filing Form 26QB on time and issuing Form 16B promptly to the seller are the two actions that keep your clients clean. Missing either exposes them to interest that compounds month after month.

Ready to manage all your clients' TDS timelines in one place? Try corpus free for 30 days and bring property TDS compliance under control.