TDS on Property Sale (Section 194-IA)

Calculate exactly how much TDS to deduct when buying property in India.

Buying a property over ₹50 Lakhs? Under Section 194-IA, the buyer must deduct TDS before paying the seller. Use this calculator to determine the exact TDS amount based on the Sale Consideration, Stamp Duty Value, and PAN availability to avoid severe penalties.

Calculator | 194-IA Rules | FAQs

Transaction Details

The total amount you are actually paying to the seller.

₹

The circle rate/guidance value adopted by the state govt authority.

₹

If the seller does not provide PAN, TDS jumps to 20%.

Calculation Result

Total TDS to Deduct

₹0
At 1% Rate

Base Amount for TDS

₹0

Higher of Sale / Stamp Duty

Net Payable to Seller

₹0

After deducting TDS from Sale Value

Next Steps for Buyer

  • Deduct exactly ₹0 before handing the final check/transfer to the seller.
  • Deposit this TDS online via e-Tax Payment system using Form 26QB.
  • Deadline: Within 30 days from the end of the month in which deduction is made (to avoid 1.5% p.m. penalty).
  • Issue Form 16B (TDS Certificate) to the seller.

Understanding TDS on Property Sale (Section 194-IA)

What is Section 194-IA?

Introduced by the government to track high-value property transactions, Section 194-IA requires the buyer of an immovable property (other than rural agricultural land) to deduct TDS at the time of payment to the resident seller.

  • Responsibility: Transferee (Buyer).
  • Threshold: ₹50 Lakhs or more.
  • Rate: 1% (or 20% if seller lacks PAN).

The New "Stamp Duty" Rule (2022)

A major amendment was brought in Budget 2022. Previously, TDS was calculated strictly on the sale consideration. Now, Section 194-IA mandates that TDS must be calculated on the Sale Consideration OR the Stamp Duty Value, whichever is higher.

This means if you buy a house for 45 Lakhs, but its government stamp duty value is 52 Lakhs, the 50 Lakh threshold is crossed, and you must deduct 1% of 52 Lakhs (₹52,000) as TDS.

Common Buyer Mistakes

Many buyers assume they need a TAN (Tax Deduction Account Number) to deduct TDS. You DO NOT need a TAN. You only need your PAN and the Seller's PAN to file Form 26QB. Failing to deduct TDS puts the liability entirely on the buyer, leading to a 1% per month penalty for late deduction, and 1.5% per month for late deposit, plus ₹200/day late filing fees.

Frequently Asked Questions

Is TDS under 194-IA applicable on agricultural land?
No, the purchase of rural agricultural land is explicitly excluded from Section 194-IA. However, if the agricultural land is situated within specified urban municipal limits, TDS will apply if the value exceeds ₹50 Lakhs.
What if there are multiple buyers or multiple sellers?
The threshold of ₹50 Lakhs is checked on the total property value, NOT on individual shares. If a property is bought for 60 Lakhs by two buyers (30 Lakhs each), TDS is still applicable because the absolute property value exceeds 50 Lakhs. Separate Form 26QB must be filed for each buyer-seller combination.
Can the seller claim a refund of this TDS?
Yes, the seller can claim the TDS credit against their final capital gains tax liability when they file their Income Tax Return (ITR). If they have no tax liability, they can claim a refund. The buyer must issue Form 16B so the seller has proof of deduction.
How do I pay TDS if I am paying the property price in installments?
If you are paying in installments (like buying from a builder), you must deduct 1% TDS proportionally on every installment paid. Do not wait until the final installment to deduct the whole amount, as it will attract late deduction penalties.
What happens if the seller's PAN is inactive?
If the seller's PAN is inactive (e.g., not linked to Aadhaar), it is treated as PAN not provided. In this case, under Section 206AA, you are legally required to deduct TDS at the punitive rate of 20%.
6. Do I need to file an ITR if my income is below the basic exemption limit?
Usually no, but you must file if you paid TDS and want a refund, or if you meet certain criteria like spending over ₹2 Lakhs on foreign travel or depositing over ₹1 Crore in a current account.
7. What is the difference between Old and New Tax Regime?
The Old Regime allows deductions like 80C, 80D, HRA, etc., while the New Regime has lower slab rates but does not allow most deductions. From FY 2025-26, the New Regime is the default.
8. Can I switch back to the Old Tax Regime?
Salaried individuals can choose between the regimes every year. However, individuals with business income can switch only once in their lifetime.

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