TDS under Section 194-IA

Section 194-IA of the Income Tax Act requires a buyer of immovable property (other than agricultural land) from a resident seller to deduct tax at 1% when the consideration is ₹50 lakh or more. Since 1 April 2022, TDS applies on the higher of the consideration and the stamp duty value. Since 1 October 2024, the ₹50 lakh threshold is tested on the total consideration even when there are several buyers or sellers.

The buyer pays the TDS through Form 26QB, a challan-cum-statement, within 30 days from the end of the month in which the deduction is made, and gives the seller Form 16B. No TAN is required.

Example: a buyer pays an instalment of ₹10,00,000 on a ₹75,00,000 flat. They pay ₹9,90,000 to the developer and ₹10,000 to the government via 26QB. The developer's ledger must credit the full ₹10,00,000 once the 26QB is verified.