Rectification of TDS return - Sale of property

This query is : Resolved

Quick Summary

In multi seller property deals, separate Form 26QB per seller is required. Reporting full TDS in one name is wrong. Buyer must correct via TRACES. If not, sellers can issue legal notice and approach buyers jurisdictional AO or TDS officer; liability remains with buyer.

Suraj

Suraj (Querist)
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12 April 2026 Dear Sir,

I seek your guidance regarding the following matter:

Mr. X, the buyer, purchased a residential unit along with land from four sellers — A, B, C, and D — for ₹1.80 crores on 23/09/2025. However, Mr. X did not deduct and deposit TDS at the time of the agreement.

He was required to deduct equal TDS in the names of all four sellers. Instead, in February 2026, he reported and deducted the entire sale proceeds and corresponding TDS in the name of Seller A only, which is incorrect. At the registrar's office, the property appears in the names of all the sellers. This will create a mismatch if the return is filed in Mr. A's name only.

Despite repeated follow-ups requesting Mr. X to rectify the TDS return and deposit the TDS proportionately in the names of all sellers, he has shown no interest in doing so.

Kindly advise:

What remedies are available to all sellers in this regard?

What steps should be taken if the buyer remains reluctant to rectify the TDS return?

Your guidance will be greatly appreciated.

Regards,
Suraj

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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12 April 2026 In a transaction involving one buyer and four sellers, separate Form 26QB compliances were required for each buyer-seller combination as per respective share. Deducting and reporting the entire TDS in the name of only one seller is incorrect and liable to be corrected by the buyer through TRACES. If the buyer refuses, the sellers should issue a written legal notice and approach the jurisdictional TDS/AO with the sale deed and ownership breakup. The default, interest and correction burden remain on the buyer.

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Suraj

Suraj (Querist)
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12 April 2026 Thanks Aashok ji. I want to understand: 1) Is it the Jurisdictional AO or TDS officer of the buyer or Seller A to approach? 2) Is the Income Tax AO or TDS officer helpful in this matter?

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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12 April 2026 For a property purchase from 4 sellers, 4 separate 26QB forms were required in proportion to each seller’s share. Filing the whole TDS in only one seller’s name is incorrect. The buyer alone must initiate correction on TRACES. If he refuses, the sellers should send a formal notice, collect all supporting documents, and approach the buyer’s jurisdictional AO / TDS officer because the buyer is the deductor in default. The TDS/AO route is the correct primary remedy, with grievance escalation and legal notice/civil action as the next steps.

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