TDS on Property Purchase: A Buyer's Complete Guide (Form 141, from 1 April 2026)

When you buy immovable property in India, the law makes you — the buyer — responsible for deducting tax at source. Not the seller, not the builder, not your bank. Most disputes we see arise not because someone refused to comply, but because the buyer simply did not know the obligation was theirs.

From 1 April 2026 the framework has changed. The provision that was Section 194-IA of the Income-tax Act, 1961 now sits at Section 393(1) of the Income-tax Act, 2025, and the familiar Form 26QB has been replaced by Form 141. The rate and the threshold are unchanged. What has changed is the numbering, the form, and the certificate.

Which law applies to your transaction

The date of payment decides this, not the date of your agreement.

• Paid or credited on or before 31 March 2026 — old regime: Section 194-IA, Form 26QB, certificate in Form 16B.
• Paid or credited on or after 1 April 2026 — new regime: Section 393(1), Form 141 (Schedule B), certificate in Form 132.

So if you signed the agreement in early 2026 but pay an instalment in July 2026, that instalment goes on Form 141. Filings already made on Form 26QB remain valid and need not be redone.

When TDS applies

You must deduct 1% of the consideration where all of the following are true:

• You are buying immovable property — land, a building, or part of a building
• The seller is a resident of India
• The consideration is ₹50 lakh or more

TDS is calculated on the higher of the sale consideration or the stamp duty value. Agricultural land is outside this provision.

Residential or commercial, ready or under construction

The provision does not distinguish between a flat, a shop, an office or a plot. Residential and commercial property are treated alike.

Nor does it matter whether the property is ready or still being built. This is where buyers of under-construction property go wrong. If you are buying from a developer under a construction-linked plan, TDS must be deducted on every instalment, from the first one, the moment the total agreed consideration crosses ₹50 lakh. Waiting for possession or for the registered deed before deducting is a common and expensive mistake.

If your purchase is financed by a housing loan, the obligation is still yours. The bank disbursing money to the builder does not discharge your duty to deduct.

When there are two or more buyers

This is the point most people get wrong, and the law was tightened precisely because of it.

From 1 October 2024, the ₹50 lakh threshold is tested on the aggregate consideration for the property — not on each buyer's share.

Take a flat bought for ₹90 lakh by a husband and wife in equal shares. Each pays ₹45 lakh from their own account. Before October 2024 it was argued — and often litigated — that neither crossed ₹50 lakh, so no TDS was due. That argument no longer holds. The property value is ₹90 lakh, the threshold is crossed, and each buyer must deduct 1% on the amount they pay.

Each co-buyer deducts and deposits separately, using their own PAN, on their own share of the payment. Splitting a purchase between family members does not avoid the obligation — it only multiplies the number of filings.

When there are two or more sellers

The same aggregation applies where the registry is in the name of two or more sellers. The consideration is the total payable to all of them taken together.

Practically, you must deduct against each seller separately, in the ratio of their share, and report each of them with their own PAN. Under the old Form 26QB, two buyers and two sellers meant four separate forms — a matrix that caused endless errors. Form 141 is designed to ease exactly this: a buyer can report several sellers of the same category in a single filing for the month, rather than one form per pair.

You must obtain the PAN of every seller. If a seller does not furnish a valid PAN, tax must be deducted at 20% instead of 1%.

If any seller is a non-resident — stop

Section 393(1) applies only where the seller is a resident. If even one seller is an NRI, that share falls under an entirely different provision. In that case:

• Tax is deducted at the rates applicable to non-residents, not a flat 1%
• The buyer must obtain a TAN
• The deduction is reported in the quarterly non-resident TDS return, not Form 141

This is one of the most common and most costly errors in property transactions. Check the residential status of every seller before you pay anything.

Buying as an HUF, partnership firm or company

The provision applies to any person who buys property. An HUF, a partnership firm, an LLP or a company is in exactly the same position as an individual buyer:

• Same 1% rate, same ₹50 lakh threshold, same aggregation rule
• No TAN is required for this particular deduction — the filing is PAN-based, using the PAN of the HUF, firm or company
• The Karta signs for an HUF; a partner or authorised signatory for a firm; a director or authorised signatory for a company
• A company or firm that already holds a TAN for its regular TDS still uses Form 141 for property purchases, not its quarterly TDS return

Do note that this PAN-based, no-TAN treatment is specific to property. Other payments in the same Form 141 — rent and payments to contractors or professionals — are restricted to individuals and HUFs not subject to tax audit. Property is not.

What counts as "consideration"

Consideration is not merely the base price in the agreement. It includes incidental charges recovered by the seller, such as:

• Club membership and amenity charges
• Car parking charges
• Electricity and water connection charges
• Maintenance and advance maintenance deposits

GST is excluded from the amount on which TDS is computed.

Steps to deduct and pay

1. Before paying anything, collect the PAN of every seller and confirm each seller's residential status.
2. Establish the total consideration for the property and the stamp duty value, and take the higher of the two to test the ₹50 lakh threshold.
3. Deduct 1% at the time of payment or credit, whichever is earlier — on each instalment, not at the end.
4. Pay the seller the net amount after deduction.
5. Deposit the TDS and file Form 141 (Schedule B) within 30 days from the end of the month in which the deduction was made.
6. Download the certificate in Form 132 and hand it to the seller within 15 days of the deposit.

Filing on the portal

Form 141 is filed on the income-tax e-filing portal at incometax.gov.in. The old TIN-NSDL route for property TDS is no longer available for fresh filings.

1. Log in to the portal using the buyer's PAN.
2. Go to e-File → e-Pay Tax and select Form 141, then Schedule B (transfer of immovable property).
3. Enter the buyer's and seller's details, including PAN and address. Add each seller separately where there is more than one.
4. Enter the property details — address, type, date of agreement, date of payment, total consideration, stamp duty value, amount paid in this instalment, and the TDS thereon.
5. Verify the computed TDS, then pay through net banking or an authorised bank.
6. Save the acknowledgement and challan.
7. Once processed, generate Form 132 and give it to each seller. The seller needs it to claim credit for the tax in their return.

Corrections to a filed Form 141 can be made online, within the prescribed window.

What it costs if you miss it

• Failure to deduct — interest at 1% per month from the date the tax was deductible
• Deducted but not deposited — interest at 1.5% per month until deposit
• Late filing of the form — a fee of ₹200 per day for the period of delay
• Continued default — penalty which may extend to ₹1,00,000

The buyer is treated as an assessee in default. In practice this surfaces years later, when the seller cannot claim credit, or when a demand notice arrives — usually just as the property is being sold again.

Mistakes worth avoiding

• Deducting only when the sale deed is registered, instead of on each instalment
• Assuming the threshold applies to your individual share in a joint purchase
• Ignoring the stamp duty value where it exceeds the agreed price
• Not checking whether any seller is a non-resident
• Failing to hand over the TDS certificate, leaving the seller unable to claim credit
• Excluding parking, club and amenity charges from the consideration

Buying property is usually the largest transaction a family undertakes, and the TDS obligation sits with the buyer from the very first instalment. If you are about to make a payment — particularly where there are several buyers or sellers, an under-construction property, or any doubt about a seller's residential status — it is worth confirming the position before the money moves. Get in touch.