Frequently Asked Questions

Under Section 194-IA, any buyer purchasing immovable property (other than agricultural land) worth ₹50 Lakhs or more is legally required to deduct TDS at 1% from the payment made to the resident seller and deposit it with the Income Tax Department using Form 26QB.

TDS is deducted on the higher of the total sale consideration or the stamp duty value (circle rate) of the property. If either value touches or exceeds ₹50 Lakhs, Section 194-IA applies.

Form 26QB must be filed within 30 days from the end of the month in which the tax was deducted (i.e., payment made or credited to the seller). For example, if payment is made on 15th April, Form 26QB must be filed by 30th May.

Late filing attracts a statutory fee of ₹200 per day under Section 234E until the form is submitted (capped at the TDS amount). Additionally, interest under Section 201(1A) is charged at 1% to 1.5% per month on unpaid tax.

After Form 26QB is filed and tax is deposited, payment processes on the TRACES portal (usually within 3-7 days). The buyer registers/logs into TRACES to download the Form 16B certificate and hands it to the seller as proof of tax deduction.

A separate Form 26QB must be filed for every combination of buyer and seller. For example, if 2 buyers buy property from 2 sellers, a total of 4 Form 26QB submissions are required, distributing the amounts proportionally.

No. If the seller is a Non-Resident Indian (NRI), Section 195 applies instead of 194-IA. In such cases, the buyer must obtain a TAN, deduct TDS at higher capital gains rates (approx. 20% + surcharge/cess), and file Form 27Q.

Under Section 206AA, if the seller fails to provide an operative/valid PAN linked with Aadhaar, TDS must be deducted at a higher rate of 20% instead of the standard 1% rate.