What Changed for TDS on Property Purchase in April 2026

The rules for TDS on property purchase were rewritten when the Income-tax Act, 2025 came into force on 1 April 2026. It did not change the basic idea behind property TDS, but it renamed almost everything a buyer touches. If you bought a flat a few years ago, the old terms may still be fresh in your mind, so the mapping below is worth keeping handy.

Importantly, the date of payment or credit decides which set of rules applies, not the date you file. So if you paid an instalment on 20 March 2026 and are only now catching up on the TDS, that payment still belongs to the old Form 26QB regime. By contrast, every payment made on or after 1 April 2026 goes through Form 141.

Form 141 itself is a consolidated form. It replaced four older forms, namely 26QB for property, 26QC for rent, 26QD for contractor and professional payments, and 26QE for virtual digital assets, with a separate schedule for each. As a property buyer, you only ever use Schedule B, or, from 1 October 2026, Schedule E if the seller is a non-resident. For the wider picture of all the new TDS forms, see our guide to TDS forms for FY 2026-27.

When TDS on Property Purchase Applies: The Five Tests

Before you worry about forms, confirm that TDS on property purchase applies to your deal at all. Work through the following five questions in order.

1. Is the seller a resident?

The 1% rule under Section 393(1) applies only when the seller is a resident of India. If the seller is a non-resident, a completely different provision applies, with higher rates and different paperwork. That route is covered in its own section below, because the difference is large enough to change your budget.

2. Is it immovable property other than rural agricultural land?

The rule covers any land (other than rural agricultural land) and any building or part of a building. In practice, that means flats, independent houses, villas, residential and commercial plots, shops and offices. It does not matter whether the seller holds the property as an investment or as stock-in-trade, so a purchase from a builder is covered just like a resale purchase from an individual.

Agricultural land situated in a rural area is excluded. However, land in or near a municipal area does not count as rural for this purpose, even if it is farmed, so check the location carefully before assuming the exclusion. Separately, compensation paid on compulsory acquisition follows its own TDS entry and is not handled by the buyer at all.

3. Is the consideration or the stamp duty value ₹50 lakh or more?

TDS is not required only when both the agreed consideration and the stamp duty value are below ₹50 lakh. In other words, if either figure reaches ₹50 lakh, you must deduct. This catches many buyers who negotiated a price of, say, ₹48 lakh on a plot that the state values at ₹52 lakh.

4. Are there several buyers or sellers?

Since 1 October 2024, the ₹50 lakh test looks at the whole property, not at each person’s share. So if two siblings jointly buy a ₹90 lakh flat, TDS applies even though each sibling’s share is only ₹45 lakh. Each buyer then deducts TDS on the part they pay and files a separate form.

5. Does the seller have a valid, operative PAN?

If the seller does not furnish a PAN, or furnishes one that is inoperative because it is not linked with Aadhaar, the rate jumps from 1% to 20%. Therefore, verify the seller’s PAN status on the e-filing portal before the sale deed is signed, not after.

How to Calculate TDS on Property Purchase: Base, Rate and Timing

For a resident seller, the calculation of TDS on property purchase is simple once you know three things: what amount to apply the rate to, what the rate is, and when to deduct.

The base: the higher of price and stamp duty value

You apply the rate to the higher of the agreed consideration and the stamp duty value. The stamp duty value is the value adopted by the state government authority for charging stamp duty, often called the circle rate or ready reckoner value.

What counts as consideration

Consideration is not only the base price in the agreement. The law expressly includes charges of the nature of club membership fees, car parking fees, electricity or water facility fees, maintenance fees, advance fees and similar charges incidental to the transfer. As a result, if your builder quotes ₹72 lakh for the flat plus ₹4 lakh for a parking slot and ₹2 lakh for club membership, your consideration is ₹78 lakh.

The treatment of GST on under-construction property is less settled. Many practitioners exclude GST when it is shown separately in the invoice, while others take a conservative view and include it. Because the difference is small but the risk of a short-deduction notice is real, discuss this with your chartered accountant and keep a note of the view you took.

The rate and the timing

For TDS on property purchase from a resident seller with a valid PAN, the rate is 1%, with no surcharge or cess added. You must deduct it at the time of payment or credit to the seller, whichever is earlier. So for a resale flat bought for ₹75 lakh, you pay the seller ₹74,25,000 and keep ₹75,000 aside to deposit.

For an under-construction property paid in instalments, you deduct 1% from each instalment as you pay it, provided the total consideration or stamp duty value is ₹50 lakh or more. Each instalment is reported separately, and later instalments refer back to the first filing, as explained in the Form 141 section.

If you are budgeting for the purchase, remember that the TDS is not an extra cost; it is part of the price paid to the government on the seller’s behalf. Nevertheless, it affects cash flow on the day of each payment. You can plan your loan tranches alongside your own contribution using the free home loan EMI calculator.

How to File Form 141 for TDS on Property Purchase, Step by Step

Form 141 is a challan-cum-statement. That means you report the transaction and pay the tax in a single online flow, using your own PAN. You do not need a TAN. The Income Tax Department’s user manual describes the full screen-by-screen flow; the steps below give you the sequence and the points where buyers usually go wrong.

1. Collect the details first. Keep ready the seller’s PAN, name, address, mobile number and email; the property address; the date of agreement; the date of registration if already registered; the total consideration; the stamp duty value; each buyer’s and seller’s share; and the date and amount of the payment.
2. Log in with your PAN. Go to incometax.gov.in and log in as the buyer. Form 141 is available only after login.
3. Open the payment tile. Choose e-File, then e-Pay Tax, then select Income Tax Act, 2025, then New Payment, and pick “Form 141 (Challan-cum-statement of deduction of tax under section 393(1))”. Do not pick the demand-payment version of Form 141, which is only for paying defaults already raised.
4. Select the deductee type. Choose Corporate Deductee if the seller is a company, such as most builders, or Non-Corporate Deductee for an individual, HUF or firm. The fourth character of the seller’s PAN tells you: “C” means a company.
5. Choose Schedule B. Select “TDS on transfer of immovable property” and fill the transaction details: property type, address, dates, stamp duty value, total consideration, the party-wise shares and the payment details. For a second or later instalment, enter the acknowledgement number of the earlier filing and the cumulative consideration paid so far.
6. Check the tax figure and pay. Confirm the TDS amount, add any interest or late fee if you are filing late, and pay through net banking, debit card or another available mode.
7. Save the acknowledgement. You will receive an SMS and email. The filing also appears under e-Pay Tax, Payment History. Keep the acknowledgement number safe, because you need it for later instalments and for the certificate.

The following video walks through a live Form 141 filing for property TDS. Portal screens change from time to time, so use it to get familiar with the flow rather than as a click-by-click script.

Rules for joint buyers and multiple sellers

According to the department’s Form 141 FAQs, each deductor must file a separate Form 141. So if you and your spouse buy jointly, each of you files your own form for the amount you pay. Within your form, you still disclose all the buyers and sellers and each person’s percentage share, which must total 100%.

On the other hand, a single buyer can cover several sellers in one form, provided they are all of the same deductee type and the deduction happened in the same month. If one seller is a company and the other an individual, you file two forms.

TDS on Property Purchase in Special Situations

The standard rules cover most purchases. However, a few situations raise questions often enough to deserve a direct answer.

Gifted or inherited property

TDS on property purchase applies to a payment made as consideration for a transfer. When a parent gifts a flat to a child, or when property passes by will or succession, nobody pays a price, so there is nothing to deduct from. The recipient may have other tax points to consider, for example the rules on gifts from non-relatives, but the buyer-side TDS obligation does not arise.

Buying from a builder versus an individual

The obligation is identical whether the seller is a developer or a family selling their old home. The practical difference lies in the form: most builders are companies, so you select Corporate Deductee, while an individual seller is a Non-Corporate Deductee. In addition, builders typically raise demand letters for each construction stage, and each demand paid is a separate instalment for TDS purposes.

Property in one name, money from another

The person responsible for TDS is the transferee, that is, the buyer named in the agreement. If a father pays part of the price for a flat registered in his daughter’s name, the daughter remains the buyer and the deductor, so the Form 141 should be filed under her PAN. Where both names appear on the agreement, both are buyers, and each deducts on the amount they pay.

Cancellation or renegotiation after TDS is paid

Sometimes a booking is cancelled after one or two instalments. The TDS already deposited stands in the seller’s credit, and the seller accounts for it in their own return. Therefore, the buyer’s refund from the builder should be settled net of the TDS already reported, and both sides should keep the cancellation letter and the Form 132 certificates together. If the price is renegotiated downward before later instalments, apply 1% to the revised figures from then on, keeping in mind the stamp duty value floor.

Deadlines, Interest and Late Fees for TDS on Property Purchase

Both the payment of TDS and the filing of Form 141 are due within 30 days from the end of the month in which you deducted the tax. After that, you must download the certificate in Form 132 from the TRACES portal and give it to the seller within 15 days from the Form 141 due date.

What happens if you are late

With TDS on property purchase, delays cost money in three separate ways, so it helps to understand each one.

• Interest for late deduction or late payment. Interest runs monthly, and a part of a month counts as a full month. Under the old Section 201(1A), the rates were 1% per month from the date the tax should have been deducted until it was deducted, and 1.5% per month from deduction until payment. The 2025 Act continues this interest structure, and the Form 141 utility computes it when you file late.
• Late fee for the statement. A fee of ₹200 per day applies until Form 141 is filed, capped at the amount of TDS.
• Penalty and default status. If TDS is not deducted or not paid at all, the buyer can be treated as an “assessee in default” for the amount, and a penalty can apply for failing to furnish the statement within the prescribed time.

For example, suppose you deducted ₹75,000 on 10 October 2026 but filed only on 9 December 2026, nine days late. The late fee alone would be ₹1,800, and interest at 1.5% per month for the months from October to December would add roughly ₹3,375. Neither amount is large, yet both are entirely avoidable.

Buying From an NRI Seller: How TDS on Property Purchase Changes

When the seller is a non-resident, the 1% rule does not apply. Instead, you deduct tax under Section 393(2) of the 2025 Act, formerly Section 195, at the rates that apply to the seller’s income. For property, that income is usually a capital gain, so the rate follows the capital gains rate plus surcharge and cess. Moreover, there is no ₹50 lakh threshold; TDS applies whatever the value.

The rate: on the whole price, not just the profit

In practice, unless the seller produces a certificate for lower or nil deduction, buyers deduct on the entire consideration, because they cannot verify the seller’s cost of purchase. For a long-term capital gain on property, the base rate is 12.5%. Surcharge depends on the amount, and for capital gains of this kind it is capped at 15%, with 4% cess on top.

Consider an NRI who sells a Hyderabad flat to you for ₹1.5 crore. Without a certificate, TDS is 12.5% of ₹1.5 crore (₹18,75,000), plus 15% surcharge (₹2,81,250), plus 4% cess (₹86,250), a total of ₹22,42,500. That is nearly thirty times the ₹1.5 lakh you would have deducted from a resident seller.

The lower-deduction certificate

Because TDS on the full price usually exceeds the seller’s actual tax, NRI sellers commonly apply to the Assessing Officer for a certificate of lower or nil deduction, under Section 395(1) of the 2025 Act (formerly Section 197). The certificate states the rate or amount you should deduct. As a buyer, you should insist on seeing the certificate before the payment date and deduct exactly as it specifies. Since the process takes time, ask the seller to apply as soon as the price is agreed.

The 1 October 2026 change: no more TAN for individual buyers

Until now, TDS on property purchase from an NRI meant a heavy process for a resident individual buyer. They needed to obtain a TAN, deposit TDS against it, and file a quarterly non-resident TDS statement, even for a one-time purchase. Many buyers found this confusing and some simply got it wrong.

On 22 September 2026, the CBDT notified the Income-tax (Fifth Amendment) Rules, 2026, effective from 1 October 2026. Under the amended rules:

• A resident individual or HUF buying immovable property from a non-resident can report and pay TDS through Form 141 using a new Schedule E, with their PAN, without a TAN.
• Schedule E asks for the property address and type, details of all buyers and sellers with their shares, the date of agreement and registration, the stamp duty value, the total consideration, the amount on which TDS is deducted, the rate, and any certificate number.
• Where the non-resident seller has no PAN, the form requires their contact number, email, overseas address, and tax residency and identification details.
• The TDS amount reported includes surcharge and cess, and each deductor files a separate form.
• Form 132 has been amended so that the certificate covers these non-resident transfers too.

This simplification applies to individual and HUF buyers. Companies and other entities buying from non-residents should continue with their TAN-based reporting. Also note that until the portal and its FAQs are updated, some help pages may still say Form 141 is only for resident deductees; that statement reflects the position before 1 October 2026.

What the Seller Does With Your TDS

TDS on property purchase is not a tax on the buyer. It is an advance payment of the seller’s tax. Once you file Form 141 correctly, the amount appears in the seller’s Annual Information Statement and Form 26AS against their PAN. The seller then claims it as a credit in their income tax return.

If the seller’s actual tax on the capital gain is less than the TDS, they receive the difference as a refund. For instance, a resident selling for ₹75 lakh a flat bought for ₹70 lakh a few years earlier may owe little or no tax on the gain, so the ₹75,000 you deducted will largely come back to them. Conversely, a seller with a large gain will pay the balance themselves. Sellers can estimate their position using the free capital gains tax calculator.

This is also why the seller cares so much about your filing. A wrong PAN, a missing filing or a delayed deposit means their credit does not show, and their refund or return gets stuck. Consequently, a good seller will ask you for the Form 132 certificate, and a careful buyer will deliver it on time without being asked.

Four Buyers, Four Situations: Case Studies

The following examples use illustrative names and figures to show how the rules on TDS on property purchase play out.

Case 1: Ananya buys an under-construction flat from a builder

Ananya books a flat in Bengaluru for ₹82 lakh, including parking and club fees, from a builder that is a private limited company. The payment plan has eight construction-linked instalments. On her first instalment of ₹8,20,000 in October 2026, she pays the builder ₹8,11,800 and deducts ₹8,200.

She files Form 141 as a Corporate Deductee under Schedule B by 30 November 2026. For every later instalment, she files a fresh Form 141 quoting the first acknowledgement number and the cumulative amount paid. Because her bank disburses directly to the builder, she has asked the bank to release 99% of each tranche and pays the 1% from her savings.

Case 2: A couple buys a resale flat from two sellers

Vikram and Meera buy a resale flat in Pune for ₹1.1 crore, owning it 60:40. The flat is owned by two brothers equally. Vikram pays ₹66 lakh and deducts ₹66,000; Meera pays ₹44 lakh and deducts ₹44,000. Even though Meera’s share is below ₹50 lakh, TDS applies because the whole property exceeds the threshold.

Vikram and Meera each file their own Form 141. In each form, they list both brothers as sellers with 50% shares and both buyers with their 60% and 40% shares. Each brother receives Form 132 certificates from both buyers.

Case 3: Rohan buys from an NRI after 1 October 2026

Rohan agrees to buy a flat in Hyderabad for ₹1.5 crore from a seller living in Dubai. Without a certificate, TDS would be ₹22,42,500. The seller’s chartered accountant obtains a lower-deduction certificate based on the actual gain, specifying a much smaller amount.

Because Rohan pays on 15 October 2026, he does not need a TAN. He files Form 141 under Schedule E with his PAN, quotes the certificate number, deducts exactly what the certificate allows, and later gives the seller the Form 132 certificate.

Case 4: Farah gets the seller’s PAN wrong

Farah buys a ₹58 lakh flat in Ahmedabad and files Form 141 on time. However, she swaps two characters in the seller’s PAN. The seller’s AIS shows nothing, and he calls her three months later. Since corrections to Form 141 are made only through TRACES, Farah registers there as a taxpayer, files a correction with the right PAN, and the credit moves to the seller. The fix took a week, but it would have taken two minutes to prevent.

7 Costly Mistakes in TDS on Property Purchase

Most problems with TDS on property purchase come from a small set of repeat errors. Check your transaction against this list before each payment.

1. Using the agreed price and ignoring the stamp duty value. The base is the higher of the two.
2. Applying the ₹50 lakh test to each share. For joint buyers or sellers, the whole property value decides.
3. Deducting only once on an under-construction flat. Every instalment needs its own deduction and filing.
4. Leaving out parking, club and similar charges. They form part of consideration.
5. Treating an NRI seller like a resident. The provision, rate and form are all different.
6. Entering the seller’s PAN incorrectly. The credit goes astray and the seller’s return suffers.
7. Forgetting Form 132. The seller needs the certificate, and it is due within 15 days of the Form 141 due date.

Fixing Errors After You File Form 141

Mistakes in TDS on property purchase happen, and most of them can be fixed. The key is knowing where to go, because Form 141 corrections do not happen on the e-filing portal.

• Wrong PAN, amount or date. Register on the TRACES portal as a taxpayer and file a correction to the relevant Form 141. Once processed, the seller’s credit updates.
• Filing not visible. If a filed Form 141 does not appear in Payment History, raise a grievance on the e-filing portal promptly.
• Short deduction discovered later. Deduct and deposit the shortfall with interest as soon as you notice it, and file a fresh Form 141 for it. The sooner you act, the lower the interest.
• Old-regime payment missed. For a payment made before 1 April 2026, the old Form 26QB route still applies, even if you are filing now.

If a notice arrives, respond on time and keep your acknowledgements, challan details and correspondence with the seller together. Many notices on property TDS close quickly once the buyer shows that the tax was paid and only a detail was wrong.

Key Takeaways

Frequently Asked Questions

Conclusion: Handle TDS on Property Purchase Before You Sign

TDS on property purchase is one of the few tax jobs the law gives to ordinary buyers, and the rules for 2026 are clearer than they look. For a resident seller, it is 1% of the higher of price and stamp duty value, filed in Form 141 within a month and a bit of paying. For an NRI seller, it is a larger, capital-gains-based deduction, which from 1 October 2026 no longer needs a TAN.

The buyers who have no trouble are the ones who treat TDS as part of the closing checklist: they verify the PAN, confirm the stamp duty value, agree the TDS split with the bank and the seller, and file the same week they pay. Do that, and TDS on property purchase becomes a fifteen-minute task rather than a notice months later.

For more on TDS rules under the new Act, explore our complete TDS Guide and the latest articles in our TDS and TCS topic hub. If you are selling as well as buying, estimate your tax with the free Capital Gains Tax Calculator.

For official references, see the Income Tax Department’s Form 141 FAQs, the Form 141 user manual, the department’s page on TDS on purchase of immovable property, and the TRACES portal for certificates and corrections.