When you buy an immovable property in India worth Rs 50 lakh or more, the law makes you — the buyer — responsible for deducting tax at source and depositing it with the government. This requirement under Section 194-IA of the Income-tax Act catches many first-time buyers by surprise, and getting it wrong can hold up the seller’s tax credit and attract interest and penalties. This 2026 guide explains who deducts, how much, and the exact steps to file Form 26QB and issue Form 16B.<\/p>\n
Section 194-IA obliges the buyer of any immovable property (other than agricultural land) to deduct 1% TDS<\/strong> where the sale consideration is Rs 50 lakh or more<\/strong>. The key features are:<\/p>\n TDS is deducted at the time of payment or credit, whichever is earlier<\/strong>. For property bought with a single payment, this is at the time of payment. For instalment purchases (common in under-construction property), TDS at 1% must be deducted on each instalment<\/strong> once the total consideration is Rs 50 lakh or more, not just on the final payment.<\/p>\n Where a property has more than one buyer or seller (for example, a jointly owned flat), a separate Form 26QB<\/strong> is required for each unique buyer-seller combination. So two buyers purchasing from two sellers would file four Form 26QB statements, each reflecting the respective share of the consideration. The Rs 50 lakh threshold is judged on the total value of the property, not each person’s share.<\/p>\n Form 26QB is a challan-cum-statement<\/strong> that serves as both the TDS return and the payment challan for Section 194-IA. The buyer must file Form 26QB and pay the deducted tax within 30 days from the end of the month<\/strong> in which the deduction is made. For example, if TDS is deducted on 10 September, the due date is 31 October.<\/p>\n After the Form 26QB payment is processed, the buyer must download Form 16B<\/strong> — the TDS certificate — from the TRACES portal and hand it to the seller. Form 16B must be issued within 15 days<\/strong> from the due date of filing Form 26QB. The seller uses this certificate to claim credit for the TDS in their income tax return, where it also reflects in Form 26AS and the Annual Information Statement (AIS).<\/p>\n The typical document flow is therefore: deduct 1% TDS, file Form 26QB and pay within 30 days, then download and issue Form 16B within 15 days of that due date.<\/p>\n Non-compliance is costly, and several charges can stack up:<\/p>\n Because these are the buyer’s obligations, the buyer bears the consequences of any default, even though the money ultimately belongs to the seller.<\/p>\n\n
When TDS must be deducted<\/h2>\n
Multiple buyers or sellers<\/h2>\n
What is Form 26QB?<\/h2>\n
How to file Form 26QB step by step<\/h3>\n
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Issuing Form 16B to the seller<\/h2>\n
Interest and penalties for default<\/h2>\n
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\n \nDefault<\/th>\n Consequence<\/th>\n<\/tr>\n<\/thead>\n \n Failure to deduct TDS<\/td>\n Interest at 1% per month from the date it was deductible to the date of deduction<\/td>\n<\/tr>\n \n Deducted but not deposited<\/td>\n Interest at 1.5% per month from deduction to deposit<\/td>\n<\/tr>\n \n Late filing of Form 26QB<\/td>\n Late fee of Rs 200 per day under Section 234E, capped at the TDS amount<\/td>\n<\/tr>\n \n Non-filing \/ incorrect filing<\/td>\n Penalty of Rs 10,000 to Rs 1,00,000 under Section 271H<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Special cases to watch<\/h2>\n
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