Introduction

When purchasing an immovable property (other than agricultural land) valued above ₹50 lakhs, the buyer is legally required to deduct 1% TDS from the sale consideration and deposit it with the Income Tax Department.

This deduction ensures proper reporting of high-value property transactions and prevents tax evasion.

Form 26QB is the online challan-cum-statement used by buyers to deposit this TDS and report the property transaction under Section 194-IA.

This guide explains the TDS rules, applicability, filing process, payment method, penalties, and important compliance requirements for buyers.

What Is Section 194-IA?

Section 194-IA of the Income Tax Act mandates that:

• The buyer (not the seller) must deduct 1% TDS

• Applicable only when the property value < ₹50 lakhs

• TDS must be deducted before making payment to the seller

This applies to:



• Residential property

• Commercial property

• Land (other than agricultural land)

What Is Section 194-IA?

Form 26QB must be filed when:

• A buyer purchases immovable property above ₹50,00,000

• Seller is a resident of India

• Payment is made in instalments or lump sum

• More than one buyer or seller is involved (each combination files a separate 26QB)

❌ Not Required for:

• Sale of agricultural land

• Seller being an NRI (instead use Form 27Q, with higher TDS rates)

Rate of TDS Under Section 194-IA

Important Notes:

• PAN of both buyer and seller is mandatory

• If seller does NOT provide PAN → TDS must be deducted at 20%

• TDS is calculated on the total sale value, not stamp duty value

Step-by-Step Process to File Form 26QB and Pay TDS

Step 1: Visit TIN-NSDLPortal

Go to https://www.tin-nsdl.com and select TDS on Sale of Property (Form 26QB).

Step 2: Fill Buyer and Seller Details

Enter:

• Name, address, and PAN of both parties

• Property details and full sale value

• Date of payment/credit

• Amount paid and TDS amount

Step 3: Choose Payment Method

You may pay:

• Online via Net Banking

• E-payment through authorised bank

• Generate challan for offline bank payment

Step 4: Submit Form 26QB

A confirmation page and acknowledgment number are generated.

Step 5: Download Form 16B (TDS Certificate)

• Log in to TRACES

• Download Form 16B

• Provide it to the seller as proof of TDS deduction

Due Dates

• TDS must be paid within 30 days from the end of the month in which deduction is made.

• Form 26QB filing and TDS payment happen together.

Penalties and Interest for Non-Compliance

Special Situations

✔ Multiple Buyers/Sellers

A confirmation page and acknowledgment number are generated.

✔ Payment in Installments

TDS must be deducted on each installment.

✔ Home Loan Buyers

TDS is deducted on the actual amount paid to the seller, not on loan disbursed by bank.

Why Filing Form 26QB Correctly Is Important

• Ensures clean ownership records.

• Avoids penalties under Income Tax Act.

• Required for property registration and future sale

• Ensures seller gets credit for tax deducted

• Prevents mismatch in AIS/TIS and 26AS.

Conclusion

Form 26QB is a mandatory compliance step for anyone purchasing property above ₹50 lakhs. Filing it accurately ensures transparency, prevents interest and penalties, and keeps both buyer and seller compliant under Section 194-IA.

Bisways Consulting Group assists buyers with TDS calculation, Form 26QB filing, Form 16B download, payment verification, and end-to-end support for property-related compliance.