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TDS on Property Purchase in India

TDS on property purchase is a tax rule in India that asks buyers to cut 1% tax from payments over ₹50 lakh. This keeps sellers honest and helps the government get tax money early. You handle it as the buyer under Section 194IA of the Income Tax Act.

Many folks in Pune face this when buying homes or shops in spots like Wagholi or Moshi. GS Developers makes deals smooth so you focus on your new home.

What Is TDS on Sale of Property Under Section 194IA?

TDS stands for Tax Deducted at Source. It means you take out tax before handing money to the seller. Section 194IA says this for any immovable property deal over ₹50 lakh.​​

Think of it like this: You buy a flat for ₹60 lakh. You pay the seller ₹59.4 lakh and send ₹60,000 to the government. The seller claims that tax later in their return. This rule started in 2013 to stop black money in real estate.​

It covers homes, flats, shops, land, and even under-construction units. But farm land often skips it. Buyers always deduct, never sellers.

Key Conditions and Requirements of Section 194IA

The deal must top ₹50 lakh total value. That includes all payments, even in stages for under-construction homes. You need PAN from both you and the seller.

No PAN? TDS jumps to 20%. Always double-check PAN before money moves. This applies across India, from Pune to Mumbai.​

Payments count from the sale agreement date. Even advance money triggers it if total hits the limit. Keep records safe for years.

Exceptions and Cases Where TDS on Property Is Not Applicable

No TDS under ₹50 lakh. Farmland outside city limits skips too. Sales by the government or RBI don’t need it.

Joint owners? Total value matters, not per person share. But if all shares stay under the limit, you skip. Inherited property or gifts have other rules.​

Under construction? TDS on each payment chunk if the total is over the limit. Check your agreement closely.

TDS Rates Chart for Property Deals in India

Rates stay simple at 1% for Section 194IA. Here’s the quick look:

SectionDeal TypeRateThreshold
194IAProperty sale (residents)1%₹50 lakh+ ​
195NRI sellers20.8%+Any amount ​
No PANAny seller20%₹50 lakh+ ​

What Is Form 26QB and Why It Is Important for Buyers?

Form 26QB is your online ticket to pay TDS. It works as a challan and report in one. File it on the tax portal before paying the seller.​​

It links your PAN, the seller’s PAN, and property details. Without it, registry offices block your deal. Sellers get Form 16B from it for their taxes.​

Miss it? Penalties hit hard. Pune buyers use it daily for Wagholi flats or Kesnand shops.

Step-by-Step Process to Pay TDS on Property Purchase Online

Follow these easy steps on incometax.gov.in:

  1. Log in with PAN and password. New? Register first.​

  2. Pick ‘e-Pay Tax’ then Form 26QB.

  3. Add seller PAN, your details, property address, and sale value.

  4. System shows 1% TDS. Pay by net banking or card.

  5. Get CIN and download receipt. Share copy with seller.​​

Do it within 30 days from month-end of payment. 

How to Download Form 16B TDS Certificate from TRACES

TRACES is the TDS portal. Log in with TAN after 5-7 days of payment.​

Go to ‘Form 26QB’ section, pick statement, download Form 16B. Email it to seller within 15 days of filing.​

Seller needs it for ITR credit. Keep your copy for buyer records too.

Time Limits, Penalties and Consequences of Not Filing Form 26QB

Pay by 30th of next month after credit to seller. Late? 1.5% interest per month kicks in.

No pay? Penalty equals TDS amount, plus up to ₹10,000 fine. Registry stops without it. Courts may unwind deals.​

Real example: Pune buyer late on ₹1 lakh TDS paid ₹1.5 lakh extra in interest. Act fast.

TDS on Sale of Property to NRI vs Resident (Section 194IA vs 195)

Residents: Simple 1% via 26QB. NRIs: Section 195, rates start 20.8% on capital gains. Need CA to compute exact.

Get a lower deduction certificate from the IT dept. for NRIs. More paperwork, but doable. Pune sees many NRI deals in IT hubs.​

Residents file easy. NRIs wait longer for refunds if over-deducted.

Joint Buyer or Joint Seller Cases in Form 26QB

Multiple buyers? Split TDS by shares if separate payments. Use one 26QB per PAN group.​

Sellers: List each PAN with share. Example: Two sellers, 50-50 on a ₹70 lakh flat. Each gets 1% on ₹35 lakh deducted.

ScenarioTotal ValueTDS SplitForm Tip ​
2 Joint Buyers, Same PAN₹60 lakh₹60,000 totalOne 26QB
2 Sellers, Different PAN₹80 lakh₹40,000 eachList both PANs
3 Buyers, Uneven Shares₹55 lakhBy agreement %Pro-rate amounts​

How TDS Fits Your ITR Filing Process

Buyers report TDS in their ITR under Schedule TDS. No big form needed.

Sellers claim credit with Form 16B in ITR-2 or 3. File by July 31. Overpaid? Get a refund.

Pune families save time with online filing. Link to Aadhaar for speed.

Recent Changes: Form Names and Rules for 2026

Form 16A now Form 131 for non-salary TDS. But 26QB and 16B stay same.​

PAN rules tighten: ₹20 lakh threshold for some deals. Ready Reckoner rates up 5-7% in Pune.​

No TDS rate hike yet. Watch Budget 2026.

Common Mistakes and How to Avoid Them

Forget the threshold—pay on ₹49 lakh deals. No PAN – face 20% hit. Late pay – interest piles up.​

Skip Form 16B – seller mad, no ITR credit. Always verify property type.​

Why Pune Buyers Love GS Developers Deals

GS Developers served 1500 families with clear processes. Wagholi High Street shops handle TDS smooth.​​

Check their homes near metro lines. Easy reach to IT hubs. Your family grows here.

Ready for your property step? Visit gsdeveloperspune.com today.

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wagholi high street

Wagholi High Street

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Shops, Showrooms, Offices

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Shops, Showrooms, Offices

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Shops, Showrooms, Offices

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