Buying property of ₹50 lakh or more? As the buyer, you must deduct 1% TDS, pay it through Form 141 (Schedule B), and issue Form 132 to the seller. This guide explains Section 393(1) of the Income-tax Act, 2025 in simple steps, with due dates, penalties, and examples. Need help in TDS on Sale of Property? Our CA team can handle it for you.
Buying or selling an immovable property in India involves several tax compliance requirements, including Tax Deducted at Source (TDS). Under the Income-tax Act, 2025, buyers purchasing property above the prescribed threshold are required to deduct TDS from the payment made to the seller and deposit the amount with the Income Tax Department.
With effect from 1 April 2026, the Income-tax Act, 2025 introduces a revised compliance framework for TDS on property transactions. Under Section 393(1), Table Serial No. 3(i), the buyer is required to deduct TDS at 1% on the higher of the property consideration or stamp duty value, subject to the prescribed threshold.
The earlier Form 26QB has been replaced by Form 141 (Challan-cum-Statement) for reporting and depositing TDS on the transfer of immovable property involving a resident seller. After successful filing and processing, the buyer can download the TDS certificate in Form 132 and provide it to the seller.
TDS on the sale of property is a tax deduction obligation imposed on the buyer when purchasing specified immovable property exceeding the prescribed monetary threshold.
Under this provision, the buyer must deduct a portion of the property transaction value as TDS and deposit it with the Central Government on behalf of the seller.
The objective of this provision is to ensure tax collection at the time of property transactions and maintain transparency in high-value real estate dealings.
Under the Income-tax Act, 2025, TDS on the transfer of immovable property is governed by:
The tax rules for property TDS are largely the same. What changed are the section number and the forms.
| Particulars | Earlier (Income-tax Act, 1961) | Now (Income-tax Act, 2025) |
|---|---|---|
Class 1 | Section 194-IA | Section 393(1), Table Sl. No. 3(i) |
Payment and reporting form | Form 26QB | Form 141 (Schedule B) |
TDS certificate to seller | Form 16B | Form 132 |
TDS rate and threshold | 1% on ₹50 lakh or more | 1% on ₹50 lakh or more (unchanged) |
Deposit due date | 30 days from end of month of deduction | 30 days from end of month of deduction (unchanged) |
TAN requirement | Not required | Not required |
The responsibility for deducting TDS rests with the buyer or transferee of the property.
Any person purchasing an immovable property other than excluded agricultural land is required to comply with the TDS provisions if the transaction meets the prescribed threshold.
The provision applies to:
Unlike certain other TDS provisions, the buyer’s turnover or business status does not determine applicability.
Important: Even an individual who is not required to maintain books of accounts or undergo a tax audit may be responsible for deducting and depositing TDS on a qualifying property purchase.
TDS is applicable when the consideration for the transfer of immovable property or its stamp duty value reaches the prescribed threshold of ₹50 lakh.
The provision covers:
The threshold is considered with reference to the aggregate transaction, including cases involving multiple buyers or sellers, as prescribed under the applicable provisions.
TDS under Section 393(1), Table Serial No. 3(i), is generally not applicable in the following situations:
Note: A property transaction should not be treated as exempt merely because the individual buyer is not engaged in business. The threshold and nature of the transaction must be examined.
The rate is 1% of the higher of the sale consideration and the stamp duty value. The consideration includes charges such as club membership, car parking, maintenance, and advance fees that are part of the transfer. TDS is deducted on every payment, including each instalment, at the earlier of credit to the seller or actual payment.
| Case | Consideration / Stamp Duty Value | TDS |
|---|---|---|
Both below ₹50 lakh | ₹45 lakh / ₹48 lakh | No TDS |
Consideration is higher | ₹80 lakh / ₹70 lakh | 1% of ₹80 lakh = ₹80,000 |
Stamp duty value is higher | ₹70 lakh / ₹85 lakh | 1% of ₹85 lakh = ₹85,000 |
Agricultural land | Any value | No TDS under this provision |
The buyer must deduct TDS at the earlier of the following events:
TDS is not required to be deducted only at the time of registration of the property.
If the buyer makes payment in multiple installments, TDS must be deducted at the time of each payment or credit, whichever occurs earlier.
For example:
| Installment | Payment Amount | TDS at 1% |
|---|---|---|
First installment | ₹20,00,000 | ₹20,000 |
Second installment | ₹30,00,000
| ₹30,000 |
Final installment | ₹30,00,000 | ₹30,000 |
Total | ₹80,00,000 | ₹80,000 |
The buyer must report the transaction through the applicable installment options in Form 141, Schedule B.
Form 141 is the new Challan-cum-Statement introduced under the Income-tax Rules, 2026 for reporting and depositing TDS on specified transactions.
For property transactions involving a resident seller, Form 141 is filed under:
Schedule B – TDS on Transfer of Immovable Property under Section 393(1), Table Serial No. 3(i).
Under the new tax compliance framework, Form 141 replaces the earlier Form 26QB for reporting TDS on qualifying property transactions.
The form combines two important compliance activities:
The buyer of the property is responsible for filing Form 141 and depositing the applicable TDS.
The buyer is treated as the deductor, while the property seller is treated as the deductee.
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The buyer files Form 141 (Schedule B) on the Income Tax Department e-filing portal using their own PAN. Follow these steps.
Check that the seller is a resident, the property is not agricultural land, and the consideration or stamp duty value (whichever is higher) is ₹50 lakh or more.
Keep the PAN of buyer and seller, addresses, property address, agreement date, consideration, stamp duty value, and payment date ready.
Deduct 1% on the higher of consideration and stamp duty value, at the earlier of credit to the seller or payment, including each instalment.
Log in to the Income Tax E-Filing portal with your PAN and choose the TDS on property option (Form 141, Schedule B) under e-Pay Tax.
Enter the details, check the computed TDS, add interest or late fee if you are late, and pay online. Save the acknowledgement and challan.
After processing, log in to TRACES, request Form 132 using the acknowledgement number, and give the certificate to the seller within 15 days from the due date of Form 141.
Form 132 is the TDS certificate prescribed under Section 395(4) of the Income-tax Act, 2025.
It serves as official proof that the buyer has deducted TDS from the property transaction and deposited the amount with the Central Government.
Under the Income-tax Rules, 2026, Form 132 consolidates the earlier TDS certificate forms, including Form 16B, 16C, 16D and 16E.
For TDS deducted on the transfer of immovable property under Section 393(1), Table Serial No. 3(i), the buyer must issue Form 132 to the seller.
The buyer or deductor who has deducted and deposited the TDS is responsible for providing Form 132 to the seller.
Form 132 is important for both the buyer and seller.
For the Seller:
For the Buyer:
The buyer can download Form 132 through the TRACES portal after successful filing and processing of Form 141.
General procedure:
Important: Form 132 cannot be independently prepared as a substitute for the official certificate. It must be generated through the prescribed TRACES facility after processing of Form 141.
Property transactions may involve multiple buyers or sellers. In such cases, the buyer must carefully report the ownership percentages and respective transaction details in Form 141.
For example:
The TDS reporting must reflect the respective shares of the buyers and sellers.
Where multiple buyers are involved, separate Form 141 filings are generally required for each deductor’s proportionate share.
The aggregate property consideration and stamp duty value should not be incorrectly reduced merely because there are multiple buyers or sellers.
| Compliance | Due Date / Charge |
|---|---|
Deduct TDS | At the earlier of payment or credit to the seller |
Pay TDS and file Form 141 | Within 30 days from the end of the month of deduction |
Issue Form 132 to seller | Within 15 days from the due date of Form 141 |
Interest if TDS not deducted on time | 1% per month or part of a month |
Interest if TDS deducted but not deposited on time | 1.5% per month or part of a month |
Late fee for delayed Form 141 | ₹200 per day until filed, capped at the TDS amount |
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It is tax the buyer deducts at 1% when buying immovable property, other than agricultural land, from a resident seller where the consideration or stamp duty value, whichever is higher, is ₹50 lakh or more. From 1 April 2026 it falls under Section 393(1), Table Sl. No. 3(i), which replaced Section 194-IA.
Form 141 is the challan-cum-statement under the Income-tax Act, 2025 used to report and deposit TDS. For property purchases it is filed under Schedule B and replaces Form 26QB for deductions on or after 1 April 2026.
Form 132 is the TDS certificate for property TDS and replaces Form 16B. The buyer downloads it from the TRACES portal after Form 141 is processed and gives it to the seller.
The buyer deducts the TDS from the payment made to the seller and deposits it with the government. The seller receives the net amount and claims credit for the TDS in their own tax return.
No. For TDS on purchase of property from a resident seller, the buyer files Form 141 using their PAN and does not need a TAN.
Form 141 and the TDS are due within 30 days from the end of the month in which the TDS is deducted. Form 132 is to be issued to the seller within 15 days from the due date of Form 141.
No. TDS under this provision does not apply when the consideration and the stamp duty value are both below ₹50 lakh, or when the property is agricultural land.
Interest applies at 1% per month if TDS is not deducted on time and at 1.5% per month if it is deducted but not deposited on time. A late fee of ₹200 per day also applies until Form 141 is filed, capped at the TDS amount.
A different provision applies. TDS on payments to non-resident sellers falls under Section 393(2), is generally computed on the full consideration at capital gains rates, and is not the simple 1% rule. Check the current rules or consult a professional before paying.