TDS 26QB – Property Purchase, Due Date & Filing Rules

Key Takeaways

1. TDS 26QB makes property buyers responsible for deducting 1% tax, filing Form 26QB on time, and issuing Form 16B properly.
    
2. Under TDS 26QB, checking the seller's PAN, residency status, and stamp duty value is critical to avoid higher TDS and penalties.
    
3. TDS 26QB compliance becomes smooth when buyers follow timelines, use CIN on TRACES, and sellers receive credit in Form 26AS.
    

Bonus Point: The Income Tax Department warns that failing to deduct TDS under Section 194-IA can label buyers as assessees in default, attracting interest, penalties, and serious compliance issues.

 A property purchase above ₹50,00,000 automatically brings TDS 26QB into the picture. It’s a simple online process where the buyer deducts tax and passes it to the government, ensuring the transaction stays compliant before ownership is fully transferred.

Form 26QB is an online challan-cum-statement used to pay 1% TDS on property purchases ₹50,00,000 and above. It works like a toll booth on a road; you move ahead only after paying the fee. Once the tax is paid, the seller receives proof in the form of Form 16B.

Neha buys a flat for ₹75,00,000. She deducts ₹75,000 as TDS and pays the balance to the seller. Neha files Form 26QB, deposits the TDS within 30 days, downloads Form 16B, and the seller later sees the credit in Form 26AS.

What Is TDS 26QB?

A 26QB TDS return means filing Form 26QB, which buyers must submit online when purchasing property worth more than ₹50 lakh. Under Section 194-IA, the buyer deducts 1% TDS and pays it to the government within 30 days, allowing the seller to claim tax credit through Form 16B.

When Is TDS on Sale of Property Applicable Under Form 26QB?

When you buy a high-value property, the Income Tax Department quietly steps in, through Form 26QB. Don’t worry, it’s simpler than it sounds.

When does Form 26QB apply?

Form 26QB comes into play only when a property transaction meets specific conditions set under Section 194-IA, making the buyer responsible for TDS compliance.
 

• Property value is ₹50,00,000 or more
• Property is immovable (house, flat, land, not agricultural land)
• Seller is a resident of India

If all these conditions are met, filing Form 26QB and deducting 1% TDS becomes mandatory, ensuring a smooth and legally compliant property purchase.

What does the buyer need to do?
 

Let’s understand it with the help of an example

Rahul purchases a flat for ₹80,00,000 and deducts 1% TDS amounting to ₹80,000. He pays ₹79,20,000 to the seller, deposits the TDS online using Form 26QB, and issues Form 16B. 

This allows the seller to claim tax credit smoothly, ensuring the entire transaction remains fully compliant and stress-free under Section 194-IA.

26QB TDS Rate on Property Sale

When a property deal crosses ₹50,00,000, TDS rules kick in, and knowing the rate can save you from costly mistakes.

TDS rates under Section 194-IA (Form 26QB)

Before paying the seller, it’s important to understand the applicable TDS rate under Section 194-IA, as it depends on the seller’s status and PAN availability.

Correct knowledge of the applicable TDS rate helps buyers prevent costly mistakes, deduct tax accurately, and keep the property transaction fully tax-compliant.

Important things to remember
 

• Buyer deducts TDS, not the seller
• No surcharge or health & education cess on the 1% TDS
• TDS must be paid via Form 26QB within 30 days

Let’s understand it with the help of an example

Amit buys a flat for ₹70,00,000; the stamp value is ₹72,00,000. TDS is 1% of ₹72,00,000 = ₹72,000. If the seller doesn’t give PAN, TDS jumps to ₹14,14,000 (20%), a huge shock!

Check PAN, seller status, and value before paying.

What is an Intimation Reference Number (IRN) in TDS 26QB?

In TDS Form 26QB for property purchases, the Intimation Reference Number (IRN) is not the main number you need. After filing Form 26QB, the system gives you an Acknowledgement Number. Once the TDS payment is made, the most important reference becomes the Challan Identification Number (CIN) or the TRACES Acknowledgement Number. 

These numbers confirm that tax has been paid and help generate Form 16B, which the seller uses to see TDS credit in Form 26AS.
The term IRN is commonly used in GST e-invoicing, not in property TDS, even though both systems use unique reference numbers.

Let’s understand it with the help of an example

Rohit buys a flat for ₹65,00,000. He files Form 26QB and gets an Acknowledgement Number. After payment, a CIN is generated. Using this CIN on TRACES, Rohit downloads Form 16B and gives it to the seller, who then sees the TDS reflected in Form 26AS.

Conclusion

TDS 26QB is a crucial compliance step for property purchases above ₹50,00,000, placing responsibility on the buyer to deduct and deposit tax correctly. Knowing rates, timelines, and CIN ensures compliant property transactions nationwide. It prevents penalties and helps sellers receive timely TDS credit.

FAQs

1. Who is responsible for filing Form 26QB and paying TDS on a property purchase above ₹50,00,000?

The buyer is responsible for deducting 1% TDS, filing Form 26QB, depositing the tax within 30 days, and issuing Form 16B to the seller.

2. If there are multiple sellers in a property purchase, can TDS be paid only once using one seller’s PAN?

No, TDS must be deducted and filed separately for each seller based on their ownership share. Each seller requires a separate Form 26QB using their own PAN details.

3. How can I legally avoid penalty and interest on TDS under Form 26QB?

Deduct 1% TDS at payment time and file Form 26QB within thirty days from the month-end. Issue Form 16B to the seller within fifteen days to avoid penalties and interest charges.

4. For a jointly purchased property, do both husband and wife need to file Form 26QB even if payment is made from one account?

Yes, Form 26QB must be filed separately for each buyer–seller combination, and TDS should be split as per ownership share (usually 50% each), regardless of who made the payment.

5. Can a buyer claim 1% TDS paid via Form 26QB as advance tax while filing ITR?

No, the 1% TDS paid under Form 26QB is the seller’s tax credit and cannot be claimed by the buyer in the advance tax section of the ITR.