TDS - Form 26 QB

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When purchasing property in India for over ₹50 lakh, the buyer is responsible for deducting TDS (Tax Deducted at Source) at a rate of 1%. This TDS amount must be remitted to the government using Form 26QB within 30 days of the deduction. The buyer will then issue a TDS certificate (Form 16B) to the seller. Ensure both buyer and seller have valid PAN cards, and be aware that a 20% TDS rate applies if the seller's PAN is not provided.

K Rajan

K Rajan (Querist)
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23 September 2025 My friend is buying a house property for Rs. 85 lakhs. While making the payment to the seller he has to deduct Rs. 85,000/- as TDS. In this regard, shall I prepare Form 26 QB and remit the TDS amount.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 September 2025 Yes, also check the circle rate of the property.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 September 2025 To deduct TDS (Tax Deducted at Source) on property in India (2025), the buyer must follow a specific process outlined under Section 194-IA of the Income Tax Act. TDS applies when the sale value or the stamp duty value of the property exceeds ₹50 lakh. Below is a concise guide based on the most recent and authoritative sources:

TDS is applicable if the sale value or stamp duty value of the property exceeds ₹50 lakh.

The buyer must deduct 1% of the higher of these two values (sale consideration or stamp duty value) before making any payment to the seller. For example, if the sale agreement is for ₹85 lakh but the stamp duty value is ₹90 lakh, TDS must be calculated as 1% of ₹90 lakh.

If the seller does not provide a PAN, TDS will be deducted at 20%.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 September 2025 PAN Collection: Ensure both buyer and seller have valid PAN cards. Collect and verify the seller’s PAN information.

Deduction: At the time of payment (whether lump sum or installment), deduct 1% TDS on the total value at each stage.

Deposit with Government: Deposit the deducted amount using Challan-cum-statement Form 26QB, available through the Income Tax e-filing or TIN-NSDL portal.

The buyer does not need a TAN (Tax Deduction Account Number); PANs of both parties are required.

Payment must be made within 30 days from the end of the month in which TDS was deducted.

TDS Certificate: After payment, download Form 16B from the TRACES portal. Provide this TDS certificate to the seller as official proof of deduction.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 September 2025 Good luck....

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