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Form 26QB: TDS on Purchase of Property (Section 194-IA)

2026-06-30 · 7 min read · by a CA firm

If you buy a property worth ₹50 lakh or more, you — the buyer — must deduct 1% TDS and pay it to the government using Form 26QB. It catches many first-time buyers by surprise because the obligation, and the penalty for missing it, sit entirely with the buyer. Here is the whole process.

26QB / 16B — new names from 1 April 2026
Under the Income-tax Act 2025, for payments on or after 1 April 2026, Section 194-IA moves to Section 393(1), Form 26QB becomes Form 141, and the Form 16B certificate becomes Form 132 (which merges the old 16B/16C/16D/16E). For payments up to 31 March 2026 the existing 194-IA / 26QB / 16B continue. The rules below are unchanged — only the form names differ by period.

When it applies

You deduct under Section 194-IA when all of these are true: the seller is a resident; the property is immovable property other than agricultural land; and the consideration is ₹50 lakh or more. If the seller is an NRI, 26QB does not apply — see the exception below.

The key rules

  • Rate: 1% (or 20% if the seller has no valid PAN).
  • Deduct on the higher of the sale consideration or the stamp-duty value.
  • Once ₹50 lakh is crossed, TDS is 1% on the entire amount, not just the part above ₹50 lakh.
  • No TAN required — you file using your PAN and the seller’s PAN.
  • Installments: deduct 1% on each installment on a pro-rata basis (don’t wait for the last payment).
  • Multiple buyers or sellers: file a separate Form 26QB for each buyer-seller combination.

Step by step

  1. Check applicability — resident seller, non-agricultural property, ₹50 lakh or more.
  2. Deduct 1% on the higher of price or stamp-duty value, at the time of payment/credit (and on each installment).
  3. File Form 26QB on the income-tax e-filing portal within 30 days from the end of the month of deduction, and pay the TDS (e-Pay Tax / net banking).
  4. Download Form 16B from TRACES once the payment is processed.
  5. Give Form 16B to the seller within 15 days of the due date.

The NRI-seller exception

This is the most expensive mistake on a property deal. If the seller is a non-resident, Form 26QB does not apply. Instead you deduct under Section 195 — typically at a much higher rate on capital gains — need a TAN, and report in Form 27Q (Form 144). See our guide on filing Form 144 / 27Q for non-residents and the Section 195 guide. Always confirm the seller’s residential status before you deduct.

Common mistakes

Deducting 1% only on the amount above ₹50 lakh (it’s the whole value); not deducting on installments as they are paid; using 26QB for an NRI seller (it’s 195/27Q); ignoring the stamp-duty value when it exceeds the price; and missing the 30-day filing window, which brings the ₹200/day fee under 234E plus interest. With several buyers or sellers, remember a separate form for each pair.

Frequently asked questions

When does it apply? Resident seller, non-agricultural property, consideration ₹50 lakh or more → 1% under 194-IA.

On the excess or the whole value? The whole value (higher of price or stamp-duty value).

TAN needed? No — use PAN. No seller PAN → 20%.

NRI seller? Not 26QB — deduct under 195 and file Form 27Q/144.

Due date / certificate? File within 30 days from month-end; give the seller Form 16B within 15 days of the due date.

Related: Form 144 / 27Q for non-residents, the Section 195 guide, and the TDS glossary.

General information for FY 2026-27 under the Income-tax Act 2025, not advice on your specific case. Property deals are fact-specific — confirm the seller’s residential status and stamp-duty value, or talk to a CA.