The responsibility to deduct and deposit tax actually falls on buyer, not the seller.
Here is the breakdown of the rules for 2026.
1. When is TDS Applicable? (Section 194-IA)
You must deduct TDS if the property’s Sale Consideration OR its Stamp Duty Value is ₹50 lakh or more.
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Rate: 1% of the total value (whichever is higher between the sale price and stamp duty value).
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If the seller does not provide a PAN, the rate jumps to 20%.
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Agricultural land in rural areas is exempt from this rule.
2. Points to Remember
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Whole Amount: The 1% is calculated on the entire amount, not just the portion above ₹50 lakh.
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Installments: If you are paying in installments (e.g., to a builder), you must deduct 1% from every installment, including any advance payment.
3. The Process (Step-by-Step)
| Step | Action | Form/Portal |
| 1. Deduct | Deduct 1% from the payment you make to the seller. | — |
| 2. Deposit | Pay the tax online within 30 days from the end of the month in which deduction was made. | Form 26QB |
| 3. Issue Certificate | Download the TDS certificate and give it to the seller within 15 days of the due date. | Form 16B |
4. Special Case: Buying from an NRI (Section 195)
If the seller is a Non-Resident Indian (NRI), the 1% rule does not apply. Instead:
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TDS is deducted under Section 195.
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The rates are much higher (usually 12.5% to 20% plus surcharge and cess, depending on capital gains).
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Crucial: You must obtain a TAN to deposit this tax.