Section 194IA - How to File TDS on Sale of Property

By Ektha Surana

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Updated on: Sep 13th, 2025

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2 min read

Under section 194-IA, a buyer buying any immovable property like house, apartment, building, land (except agricultural land) must deduct Tax Deducted at Source (TDS) on the payments made to the seller of the property. The amount of TDS deducted is 1% of the sales consideration or the stamp duty value, whichever is higher.

What is Section 194IA?

Section 194IA provides for TDS on sale of immovable property. The person who is buying the property should deduct TDS and pay the remaining amount to the seller. 1% of the selling price is deducted under this section. Please note that TDS here is not deducted on the capital gains, but on the entire selling price. If the stamp duty of the property is less than Rs. 50 lakhs, no TDS needs to be deducted.

Requirements of Section 194IA

  • The buyer has to deduct TDS at 1% of the total sale amount. Please note, the buyer is required to deduct TDS, not the seller
  • TDS is required to be deducted only if total purchase value is Rs 50 lakh or more
  • If the payment is made by instalments, then TDS has to be deducted on each instalment paid.
  • ‘Consideration for immovable’ property shall include all charges like nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charges of similar nature, which are incidental to the transfer of the immovable property. 
  • Buyer of the property need not obtain a TAN (Tax Deduction Account Number) for depositing TDS with the government. You can make the payment using your PAN.
  • For the purpose of depositing TDS, buyer will have to obtain the PAN of the seller, else TDS must be deducted at 20%.
  • TDS is deducted at the time of payment (including instalment payments) to the seller.

Exceptions for Section 194-IA

  • When the government has acquired any immovable property from you for core infrastructure and development activities, it falls under the ambit of compulsory acquisition. In such cases, the government deducts TDS under section 194LA.
  • When you sell a land which is classified as an rural agricultural land as per the income tax provisions, then no TDS needs to be deducted. This is because the rural agricultural lands are not considered as capital assets, thus exempted from capital gains.  

What is Form 26QB?

Form 26QB is the challan cum statement filed by the buyer of immovable property except agricultural land to the government providing details of the buyer, seller and the total value of sale consideration.

  • The TDS on the immovable property has to be paid using Form 26QB within 30 days from the end of the month in which TDS was deducted.
  • After depositing TDS through e-tax Payment option (Net banking) or any of the authorized bank branches to the government, the buyer is required to furnish the TDS certificate in Form 16B to the seller. This is available around 10-15 days after depositing the TDS on the TRACES portal.
  • PAN of the seller, as well as Purchaser, should be mandatorily furnished in an online form (Form 26QB) for furnishing information regarding the property transaction. Facility for furnishing information regarding the transaction of sale of immovable property and payment of TDS thereof is available on the NSDL website.

Steps to Pay TDS on Property Purchase through Challan 26QB and Get Form 16B

The steps to pay TDS through challan 26QB and to obtain Form 16B (for the seller) are as follows:

e-Payment through Challan 26QB (Online)

Step 1: Log in to your account on the Income Tax e-filing portal. Select e-File > click on e-Pay Tax from the dropdown as shown below

Step 2: Click on ‘+ New Payment’

Step 3: Click on the proceed button on the tab ‘26QB- TDS on Property’ as highlighted below

Note: In the next few steps, you will have to add the following details:

  • Add Buyer's Details
  • Add Seller's Details
  • Add Property Transferred Details
  • Add Payment Details 

Step 4: Add Buyer's Details

All your details will be auto-filled, but you can also change them if needed. After entering the details, click on ‘Continue’

Step 5: Add Seller's Details

Add all the details of the Seller like their PAN, address

Step 6: Add Property Details

Add all the property details like type, address and also the sale details like date of agreement, value etc. The tax amount will be calculated automatically. Once done, click on ‘continue’

Step 7: Add Payment Details

Select the payment mode and proceed to complete the payment. Once the payment is done, a challan will be generated.

Step 8: Register in TRACES 

  • If you are a first-time user, register on TRACES as a Tax Payer with your PAN and the Challan details of the tax payment.
  • Once you register, you will be able to obtain approved Form 16B (TDS certificate) and you can issue this Form to the Seller.
  • Check your Form 26AS seven days after payment. You will see that your payment is reflected under “Details of Tax Deducted at Source on Sale of Immovable Property u/s 194(IA) [For Buyer of Property]”.
  • Part F gives you details such as TDS certificate number (which TRACES generates), name and PAN of deductee, transaction date and amount, acknowledgement number (which is the same as the one on your Form 26QB), date of deposit and TDS deposited.

Step 9: Download your Form 16B

  • After your payment in Form 26AS has been reflected, log in to TRACES. Go to the Download tab at the tab and click on “Form-16B (for the buyer)”.
  • To finish this process, fill PAN of the seller and acknowledgement number details pertaining to the property transaction and click on “Proceed”.
  • Verify all the details once and click on “Submit a request”
  • After a few hours, your request will be processed. Click on the Downloads tab and select Requested Downloads from the drop-down menu.
  • You should be able to see that the status of your Form 16B download request is ‘available‘.
  • If the status says ‘submitted‘ wait for a few hours more before repeating the last step.
  • Download the ‘.zip file’. The password to open the ‘.zip file’ is the date of birth of the deductor (the format is DDMMYYYY). Your form will be available inside the .zip file as a pdf. Print this out.

Consequences of Non-filing of Form 26QB to the Seller

If the buyer doesn’t file Form 26QB, the seller cannot claim TDS amount while filing his Income Tax Return as it will not reflect in Form 26AS. It may lead to paying tax again for the same amount by the seller. Also, while reporting capital gain for the financial year, the seller cannot claim the TDS credit and has to pay again to the Income Tax department.

Frequently Asked Questions

What is TDS on the sale of the property?

The buyer of an immovable property (other than rural agricultural land) worth Rs. 50 lakhs or more is required to deduct TDS at the rate of 1% from the consideration payable to a resident transferor.

Who is responsible for deducting TDS on the sale of the property?

The buyer of the property is liable to deduct TDS and deposit the same to the government.

I am a buyer of the property, do I require to obtain TAN to deduct TDS on sale of property?

Buyer or Purchaser of the property is not required to procure Tax Deduction Account Number (TAN). All that is required is the buyer’s and sellers PAN to report the TDS.

What if I don’t have seller's PAN to deduct TDS on property sale?

The seller's PAN is mandatory to obtain. If the PAN is not available, TDS is to be made @ 20% of the purchase value, and then the seller will not get the credit of the TDS amount.

How are transactions of joint parties filed in Form 26QB?

Each buyer must fill out the Form 26QB challan for each unique buyer-seller combination for their respective share. 
For example, if there is one buyer and two sellers, two forms must be filled in. Similarly, if there are two buyers and two sellers, then four forms must be filled in.

I am a buyer. Should I deduct TDS on the amount exceeding the property value of Rs 50 lakh or the entire amount I bought the property?

TDS has to be deducted by the buyer on the entire amount that is paid or credited to the seller when the amount exceeds Rs 50 lakh. For example, if a property is bought for Rs 70 lakh then TDS has to be deducted on the entire amount–that is Rs 70 lakh, not on Rs. 50 lakhs or on just the Rs 20 lakh that exceeds the Rs 50 lakh threshold.

I am a buyer. How do I procure TAN to report the TDS on the sale of the property?

TAN is the Tax Deduction Account Number. Neither the buyer nor the seller is required to procure the TAN for making TDS payment on the purchase of the immovable property. However, the buyer must quote their PAN and the seller(s)’s PAN while deducting TDS on the purchase transaction.

Do I have to file Form 26QB if the payment and registration of the property was done before May 2013?

Form 26QB is applicable on the purchase of properties after 1 June 2013. Hence, for properties where the formalities were completed before this date, there is no requirement to file Form 26QB.

I am the seller of the property, how can I claim the refund of TDS deducted on the sale of the property? How much refund is received?

A seller of the property can claim the TDS deducted on an immovable property at the time of filing their income tax return. In a case where a refund arises due to TDS on the sale of a property, the refund can be claimed through an ITR filing.

What is the time limit to pay TDS on a property?

The time limit to pay TDS on a property is 30 days. TDS on immovable property transfers must be paid within 30 days after the end of the month in which the deduction is made.

Can I pay 1% TDS under section 194IA for purchasing a property from an NRI?

No, the seller should be resident for TDS deduction under this section. Click here to know more on TDS on purchasing a property from an NRI. 

What is the rate of TDS under Section 194-IA?

The rate of TDS under Section 194-IA is 1% if the sale value or stamp duty value of property exceeds Rs. 50 lakhs.

How to pay TDS on property purchase?

The buyer will have to file Form 26QB. Form 26QB is an online statement cum challan that is used for the payment of TDS. The buyer must furnish this form by filling out all the details of the property, details of the buyer, seller, tax deposits. 

How to claim TDS on purchase of property in ITR?

The TDS deducted by the buyer on purchase of a property will be available for credit to the seller. However, the seller must have provided PAN details to the buyer inorder to claim TDS credit. The seller should also make sure that the credit is reflecting in Form 26AS. 

How to pay TDS on purchase of property from NRI?

The buyer of the property is obligated to deduct TDS from the sale proceeds and deposit it with the income tax department within the specified time frame. After making the deduction, the buyer must submit the details of the deduction and payment through Form 27Q.

About the Author
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Ektha Surana

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Multitasking between pouring myself coffees and poring over the ever-changing tax laws. Here, I've authored 100+ blogs on income tax and simplified complex income tax topics like the intimidating crypto tax rules, old vs new tax regime debate, changes in debt funds taxation, budget analysis and more. Some combinations I like- tax and content, finance & startups, technology & psychology, fitness & neuroscience. Read more

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