TDS on Property Purchase: Form 26QB Is Gone, Form 141 Replaces It
If you bought a flat before April this year, you deducted 1% TDS and filed Form 26QB. If you buy one now, the deduction is still 1% — but Form 26QB no longer exists. It has been replaced by Form 141, and the certificate you hand the seller is Form 132, not Form 16B.
The change came in with the Income-tax Act, 2025, which took effect on 1 April 2026 and replaced the 1961 Act. Most of what a buyer has to do is unchanged. The parts that changed are the parts that trip people up: which form, which date decides the form, and what it costs when you get it wrong.
Key takeaways
- TDS on property is 1% of the consideration or the stamp duty value, whichever is higher, once the value reaches Rs 50 lakh.
- The governing provision is now section 393(1) of the Income-tax Act, 2025. It was section 194-IA of the 1961 Act.
- Form 26QB is replaced by Form 141, a single challan-cum-statement with four schedules. Property sits in Schedule B.
- The TDS certificate for the seller is now Form 132, replacing Forms 16B, 16C, 16D and 16E.
- The date of payment decides which regime applies, not the date of the agreement.
- Buying from a non-resident seller is a different provision entirely, needs a TAN, and 1% is the wrong rate.
What the rule asks you to do
When you buy land or a building, or part of a building, for Rs 50 lakh or more from a resident seller, you are the one who has to deduct tax. Not the builder, not your lawyer, not the bank. You.
The rate is 1%. The base is the sale consideration or the stamp duty value of the property, whichever is higher. That second half matters in markets where the circle rate or guideline value runs ahead of what people actually pay: if the agreement says Rs 52 lakh and the stamp duty value is Rs 58 lakh, you deduct on Rs 58 lakh.
The Rs 50 lakh test is on the property, not on each instalment. A Rs 80 lakh flat paid in eight instalments of Rs 10 lakh still attracts TDS, and you deduct 1% from each instalment as you pay it. Agricultural land is outside the provision.
The two-buyer, two-seller trap
People assume a joint purchase splits the property into two halves, each below the threshold. It does not. The threshold is tested on the property's total value. A Rs 90 lakh flat bought by a couple is one Rs 90 lakh property, and each buyer files for their own share of the payment against each seller's PAN. Two buyers and two sellers means four filings, not one. Getting this wrong is the single most common reason a TDS notice arrives eighteen months later.
Form 141: what actually changed
Form 141 is a consolidation. Where the old regime had Form 26QB for property, 26QC for rent, 26QD for contractor and professional payments and 26QE for virtual digital assets, there is now one challan-cum-statement with four schedules — A for rent, B for property, C for contractors and professionals, D for virtual digital assets.
| What you are doing | Before 1 April 2026 | From 1 April 2026 |
|---|---|---|
| The provision | Section 194-IA, Act of 1961 | Section 393(1), Act of 2025 |
| Challan-cum-statement | Form 26QB | Form 141, Schedule B |
| Certificate to the seller | Form 16B | Form 132 |
| Rate | 1% | 1% (unchanged) |
| Threshold | Rs 50 lakh | Rs 50 lakh (unchanged) |
| TAN needed? | No, PAN is enough | No, PAN is enough |
The reporting fields and the computation layout inside the form were redesigned too, so this is not only a change of number on the top of the page. If you are filing for the first time, do not work from a 2024 walkthrough — the screens have moved.
Which form applies to a deal that straddles the date
This is the question worth reading twice. If the agreement was signed in, say, February 2026 but you are paying instalments now, the payment date governs. TDS liability arises when you pay or credit the seller, so any payment made on or after 1 April 2026 is reported under the new provision, on Form 141. An older agreement does not keep you on the old form.
The deadlines, and what missing them costs
You have 30 days from the end of the month in which you deducted to file and pay. Deduct on 4 October, and the clock runs to 30 November. Then you download the certificate and give it to the seller within 15 days of that due date.
| What went wrong | What it costs |
|---|---|
| Deducted late | Interest at 1% a month, from the date it was deductible |
| Deducted but paid late | Interest at 1.5% a month, from the date of deduction |
| Statement filed late | Rs 200 a day until it is filed |
| Certificate to the seller filed late | Rs 100 a day |
| Not filed at all | Penalty proceedings on top of the above |
Note the part-month convention: interest runs per month or part thereof, so a payment two days into a new month costs a full month. The daily fee for a late statement is capped at the TDS amount itself, which sounds like protection until you work out that on a Rs 80 lakh flat the cap is Rs 80,000.
The mistake that costs the most: an NRI seller
Section 393(1) and its 1% rate apply to a resident seller. If the seller is a non-resident, you are in a different provision altogether, and the differences are not small.
- There is no Rs 50 lakh threshold. A Rs 30 lakh flat bought from an NRI attracts TDS.
- The rate is not 1%. It is the capital gains rate applicable to the seller, plus surcharge and cess, and it is applied to the sale value unless the seller has obtained a certificate permitting a lower deduction.
- You need a TAN. The PAN-only route that makes a resident purchase simple does not apply here, and the return is a different one.
A buyer who deducts 1% from an NRI seller because that is what the internet said has under-deducted by a large margin, and the department recovers the shortfall from the buyer, not the seller. Establish the seller's residential status in writing, early, and ask for the lower-deduction certificate if they claim one. If the seller is overseas and you are doing the reverse trip — an Indian resident buying abroad — the tax questions are different again, and our guide to buying property in Dubai from India sets out that side.
How to do it without drama
- Get the seller's PAN in writing before you pay anything. No PAN means a much higher deduction rate, and it is your problem, not theirs.
- Confirm their residential status for the year, in writing.
- Pull the stamp duty value for the property. Deduct on the higher of that and the price.
- Pay the seller 99% and set aside the 1%. Do not pay 100% and plan to collect it back.
- File Form 141 within 30 days of the month-end, using Schedule B.
- Download Form 132 from the TRACES portal and give it to the seller within 15 days of the due date.
- Keep the challan, the form and the certificate with your registration papers. You will want them when you sell.
Corrections now run through the TRACES portal, and you need to be registered there as a taxpayer to make one. Register before you need it rather than in the week the notice arrives.
What this has to do with your total cost
TDS is not a cost to you — it is the seller's tax, paid through your hands, and it shows up against their PAN. What it costs you is administration, and interest if you are late. The real money in a purchase sits elsewhere: stamp duty and registration, GST where the property is under construction, and the charges the builder adds at the end. Our pages on the GST rate on residential property and EDC and IDC charges cover those, and they are usually ten times the size of this compliance.
Treat the 1% as a box to tick correctly, on time, with the right form. That is the whole job.
Frequently asked questions
Do I still file Form 26QB after April 2026?
No. Form 26QB was withdrawn with the 1961 Act. Property TDS is now reported in Schedule B of Form 141, the unified challan-cum-statement under the Income-tax Act, 2025. If a payment falls on or after 1 April 2026, Form 141 is the correct form even when the sale agreement predates it.
Who deducts TDS on a property purchase, the buyer or the seller?
The buyer. The obligation sits on the person making the payment, and any penalty for getting it wrong is recovered from the buyer, not from the seller who received the money. Builders will often file on your behalf as a service, but the legal responsibility stays with you.
Is TDS calculated on the agreement value or the stamp duty value?
On whichever is higher. If a flat is bought for Rs 52 lakh where the stamp duty value is Rs 58 lakh, the 1% is deducted on Rs 58 lakh. This catches deals priced below the government valuation, which is exactly why the rule is written that way.
What is Form 132?
It is the TDS certificate you issue to the seller under the new Act, replacing the old Forms 16B, 16C, 16D and 16E. You download it from the TRACES portal after your statement is processed and pass it to the seller within 15 days of the filing due date. A late certificate carries a daily fee of its own.
Does a joint purchase escape the Rs 50 lakh limit?
No. The threshold applies to the value of the property, not to each buyer's share. Two people buying a Rs 90 lakh flat are buying one Rs 90 lakh property, and each files separately for their share of each payment. Two buyers and two sellers produces four sets of filings.
If you are in the middle of a purchase and unsure which form applies to your payment schedule, talk to us before you release the next instalment — it is far cheaper to ask now than to unwind it later.
