If you are buying immovable property (other than agricultural land) for ₹50 lakh or more, you must deduct TDS at 1% of the purchase consideration under Section 194-IA. This is one of the most commonly missed compliances in property transactions.
Who Must Deduct?
The buyer is responsible for TDS deduction — not the seller or the registration office. The obligation arises regardless of whether the buyer is an individual, company, or NRI. The threshold is ₹50 lakh per transaction (not per year, so if you pay in instalments totalling ₹50 lakh+, TDS applies).
Filing Form 26QB
TDS on property is deposited using Form 26QB on TIN-NSDL within 30 days from the end of the month in which payment was made. Each buyer-seller combination requires a separate 26QB. If there are two joint buyers purchasing from two joint sellers, all four combinations need separate filings.
Consequences of Non-Deduction
Penalty under Section 201 treats you as “assessee in default” — you become liable to pay the entire TDS amount with interest at 1.5% per month plus penalty equal to the TDS amount. The property registration does not exempt you from this obligation.
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