Form 26QB Explained: TDS on Property Purchase Above ₹50 Lakh — Who Files, When, How, and What It Costs to Get Wrong

Most people meet Form 26QB for the first time at a property registration, when the sub-registrar or the seller’s lawyer asks whether the TDS has been deposited. By then the buyer is often already late. Section 194-IA makes the buyer of immovable property the tax deductor: on any purchase of ₹50 lakh or more, 1% of the consideration is withheld, deposited with the government through Form 26QB, and certified to the seller in Form 16B. There is no TAN, no quarterly return, and no accountant involved unless you bring one — which is precisely why it gets missed, and why the department’s systems catch it every time.

This guide explains the form, the rules around it, the cases that go wrong, and what to do about each.

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What Form 26QB actually is

Form 26QB is a challan-cum-statement: a single online form on the TIN or e-filing portal that both reports the deduction and pays it. One form per buyer-seller pair, per payment. Filing it does three things at once — records the transaction against both PANs, deposits the 1% with the government, and generates the data from which Form 16B, the seller’s TDS certificate, is downloaded from TRACES.

Item	Rule
Who deducts	The buyer — every buyer, whether an individual buying a home or a company buying an office
On what	Purchase of any immovable property other than rural agricultural land, from a resident seller
Threshold	Consideration of ₹50 lakh or more — tested on the aggregate consideration for the property, even where there are several buyers or sellers
Rate	1% of the consideration, or of the stamp-duty value if that is higher; 20% if the seller has not furnished PAN
When to deduct	At credit or payment, whichever is earlier — including every instalment and every advance
When to deposit	Within 30 days from the end of the month in which the deduction was made
Certificate	Form 16B to the seller within 15 days of the 26QB due date
TAN	Not required — the form works on the buyer’s and seller’s PANs

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What counts as consideration

Since 2019, “consideration” for 194-IA includes every charge that is incidental to the transfer: club membership fees, car-parking charges, electricity and water facility fees, maintenance fees, advance fees, and any other charge of a similar nature. A flat priced at ₹48 lakh with ₹3 lakh of parking and club charges is a ₹51 lakh purchase, and TDS applies to all of it.

Since October 2024, the ₹50 lakh threshold is tested on the total consideration for the property, not on each buyer’s or seller’s share. Two brothers buying a ₹90 lakh house for ₹45 lakh each are each above the threshold, and each files a 26QB for their share. That reversed a widely used reading of the earlier law, and a great many joint purchases from before that date were structured to avoid TDS on exactly that basis.

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The stamp-duty-value trap

Where the stamp-duty value of the property — the collector rate in Punjab, the circle rate elsewhere — exceeds the consideration in the deed, TDS is deducted on the higher of the two. This is the property-purchase mirror of Section 50C on the seller’s side. In Kharar, Mohali, and parts of Chandigarh, collector rates in several localities run above transacted prices, and a buyer who deducts 1% on the deed value alone is short-deducting. The shortfall carries interest, and the seller’s Form 26AS then shows a figure that does not match the AIS entry from the sub-registrar — which is how both parties end up with a notice.

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Instalments, builders, and home loans

Builder purchases. TDS is due on each instalment as it is paid, not on the total at registration. A buyer paying a builder in twelve tranches files twelve 26QBs — or, more practically, one per month of payment. Missing the early ones and depositing everything at possession is a late deposit on every earlier tranche, with interest and late fees on each.

Home loans. The bank disburses to the seller or builder, but the buyer remains the deductor. Coordinate before disbursement: either the bank withholds and remits the 1%, which some lenders will do on instruction, or the buyer deducts the 1% from their own contribution and deposits it, so that the seller receives 99% in total. Banks do not file 26QB on your behalf.

Advances and token money. An advance is a payment and attracts deduction when paid. Where a deal falls through and the advance is forfeited, the deduction already deposited is the seller’s TDS credit and is not refundable to the buyer through the TDS system — a reason to keep token amounts modest until the deal is firm.

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Joint buyers and joint sellers

One 26QB per buyer-seller combination. Two buyers purchasing from two sellers file four forms, each reporting that pair’s share of the consideration. Each seller then receives Form 16B from each buyer. Where the shares are not equal, the forms must reflect the actual split in the deed; a 26QB filed by one buyer for the whole consideration, “on behalf of” both, creates a mismatch against the second buyer’s AIS purchase entry and the seller’s credit.

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The NRI seller: 194-IA does not apply

Form 26QB is for purchases from resident sellers only. Where the seller is a non-resident, Section 195 applies instead: TDS on the seller’s capital gain at the applicable rate, or on the entire consideration if the seller has not obtained a lower-deduction certificate under Section 197 — and the buyer needs a TAN and files Form 27Q, not 26QB. Buyers who file 26QB at 1% against an NRI seller have deducted under the wrong section at the wrong rate and remain liable for the difference. Our guide to buying property from an NRI covers the procedure; the seller’s route to a sensible rate is a 197 certificate applied for six to eight weeks before registration.

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What a miss costs

Default	Consequence
Failure to deduct	Interest at 1% per month from the date the tax was deductible
Deducted but deposited late	Interest at 1.5% per month from deduction to deposit
Form 26QB filed late	Late fee of ₹200 per day under Section 234E, up to the TDS amount
Form 16B not issued	Penalty of ₹100 per day under Section 272A(2)(g), up to the TDS amount
Non-filing beyond a year	Penalty of ₹10,000 to ₹1,00,000 under Section 271H

On a ₹1 crore purchase, the TDS is ₹1 lakh. A 26QB filed 100 days late carries a ₹20,000 late fee and about ₹5,000 of interest before anyone looks at the penalty provisions. And because the sub-registrar reports the sale under SFT regardless, the department already knows the purchase happened; a missing 26QB against a reported purchase of ₹1 crore is a flag on the buyer’s AIS as well as the seller’s.

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How to file, in order

1. Before registration, agree the consideration and confirm the seller’s PAN and residential status. Check the collector rate against the deed value.
2. At each payment, compute 1% of that payment (on the higher of consideration and stamp-duty value, proportionately), pay the seller the net, and note the date.
3. Within 30 days of the end of that month, file Form 26QB on the portal: buyer and seller PANs, property details, consideration, amount paid, TDS, and pay the TDS online through the form.
4. Within 15 days after that, register on TRACES as a taxpayer, download Form 16B, and give it to the seller.
5. Keep the acknowledgements. The seller will need Form 16B to claim credit; you will need the 26QB acknowledgement if the AIS entry is ever questioned.

Corrections — a wrong PAN, a wrong amount, a wrong assessment year — are made through TRACES as a 26QB correction, with the seller’s or the assessing officer’s approval depending on what is changed. They are slow. Get the form right the first time.

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What a CA actually does here, and what it costs

A single, straightforward 26QB is a form an organised buyer can file alone. Where buyers engage us is on the cases above: joint purchases with unequal shares, builder instalment schedules, a collector rate above the deed value, a seller who turns out to be non-resident, a bank disbursement that needs coordinating, or a form already filed wrong and needing correction. Our property TDS and Form 26QB service covers the deduction computation, filing for every buyer-seller pair, Form 16B issuance, TRACES corrections, and the switch to Section 195 and Form 27Q where the seller is an NRI — for a fixed fee per transaction quoted upfront, which on any ₹50 lakh-plus purchase is a small fraction of the first fortnight’s late fee.

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Frequently asked questions

Who has to file Form 26QB — the buyer or the seller?

The buyer. Section 194-IA makes the purchaser the deductor. The seller receives Form 16B and claims the credit in their return.

Is TDS on property deducted on ₹50 lakh or on the full amount?

On the full consideration once it is ₹50 lakh or more, not on the excess over ₹50 lakh. A ₹60 lakh purchase carries TDS of ₹60,000, not ₹10,000.

We are two buyers paying ₹45 lakh each for a ₹90 lakh flat. Does TDS apply?

Yes. Since October 2024 the threshold is tested on the total consideration for the property. Each buyer files a 26QB for their ₹45 lakh share at 1%.

Do I need a TAN to file Form 26QB?

No. Form 26QB works on the buyer’s and seller’s PANs. A TAN is needed only if the seller is a non-resident, in which case the deduction is under Section 195 through Form 27Q instead.

What is the due date for Form 26QB?

Within 30 days from the end of the month in which the TDS was deducted. A deduction on 10 September is due by 30 October. Form 16B follows within 15 days of that.

The seller is an NRI. Can I still file 26QB at 1%?

No. Purchases from non-resident sellers fall under Section 195, at the rate applicable to the seller’s capital gain or on the full consideration absent a Section 197 certificate, with a TAN and Form 27Q. A 26QB at 1% is the wrong section and the wrong rate, and the buyer remains liable for the shortfall.

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Related reading

• Property TDS & Form 26QB Filing — our service
• Buying Property from an NRI: TDS under Section 195
• Income Tax Notice for Capital Gains on Property Sale — the seller’s side
• Capital Gains Tax Advisory for Real Estate
• TDS Rate Chart FY 2025-26 (AY 2026-27)