TDS on Property Purchase 2026: 1% Rule, Form 141/26QB

In short

If you buy a property for ₹50 lakh or more from a resident seller, you (the buyer) must deduct 1% TDS from the price, deposit it with the Income Tax Department and file the prescribed form within the deadline. From 1 April 2026 the rule sits in section 393 of the Income-tax Act, 2025 (earlier section 194-IA).

When does TDS apply?

The property is land or a building (flat, house, site, commercial space)
The total price is ₹50 lakh or more (it is the total deal value, not each buyer’s share)
The seller is a resident Indian. For a non-resident seller, different and higher TDS rules apply.
It does not apply to rural agricultural land

The rate is 1% of the full consideration. If the seller does not give a valid PAN, a higher rate can apply.

Which law and form?

Until 31 March 2026: section 194-IA of the Income-tax Act, 1961, and Form 26QB
From 1 April 2026: section 393 of the Income-tax Act, 2025. Reports say Form 141 replaces 26QB for new transactions. Check the e-filing portal for the form it shows.

Who pays and when?

The buyer deducts the tax at the time of paying or crediting the seller, whichever is earlier. If you pay in instalments, deduct 1% on each instalment. Deposit the tax within 30 days from the end of the month in which you deducted it.

What you need

PAN of buyer and seller (check names match their PAN cards)
Addresses and contact details of both sides
Property address, agreement date and price
Payment dates and amounts
Net-banking or UPI access to pay online

Step-by-step

Log in to the Income Tax e-filing portal or the NSDL tax payment page.
Choose the property TDS option (Form 141 for new transactions, 26QB for older ones).
Fill in buyer, seller and property details carefully. Wrong PAN or amounts cause mismatches.
Verify the TDS amount and pay online.
Save the acknowledgement and challan.
After processing, download the TDS certificate (Form 16B under the old rules) from the TRACES website using the acknowledgement number, and give it to the seller.

Mistakes to avoid

Paying the full price to the seller and forgetting the TDS. The buyer remains liable.
Mismatch in the seller’s PAN spelling
Paying late. Late deduction and late payment attract interest, and a late fee for delay in filing.
Deducting TDS on the wrong amount (for example excluding part payments)

Tip: Plan this at the time of the agreement. Ask the seller to agree that 1% will be paid to the tax department and only the balance paid to them.