Section 194IA of the Income Tax Act, 1961 applies when a resident sells immovable property (land/building, excluding agricultural land) for ₹50 lakh or more. In such cases, the buyer must deduct TDS at 1% of the total consideration and deposit it with the government.
Key Provisions of Section 194IA
✅ When is TDS Deducted?
- If the property value exceeds ₹50 lakh.
- Deducted at the time of payment (including installment payments).
- No need for the buyer to have a TAN (Tax Deduction Account Number).
✅ TDS Rate Under Section 194IA
- 1% TDS on the total sale consideration.
- 20% TDS if the seller does not provide a PAN.
✅ Exemptions – When TDS is Not Required?
- When the sale value is less than ₹50 lakh.
- If the property is rural agricultural land.
- When property is compulsorily acquired by the government.
Procedure for TDS Deduction & Payment Under Section 194IA
Step 1: Deduct 1% TDS at the time of making the payment to the seller.
Step 2: Fill and submit Form 26QB (online) within 30 days from the end of the month in which TDS is deducted.
Step 3: Use PAN of both buyer & seller while filing Form 26QB.
Step 4: Pay the TDS online through net banking/debit card or at an authorized bank branch.
Step 5: After TDS payment, download Form 16B (TDS Certificate) from the TRACES portal and provide it to the seller.
Step 6: Verify the TDS deduction in Form 26AS of the seller.
Example Calculation of TDS Under Section 194IA
| Sale Price | TDS Rate | TDS Amount to Deduct |
| ₹52 lakh | 1% | ₹52,000 |
| ₹78 lakh | 1% | ₹78,000 |
| ₹1.25 crore | 1% | ₹1,25,000 |
🔹 Note: If additional charges (like club membership, parking, or maintenance fees) are included in the agreement, TDS is calculated on the total amount.
Penalty for Non-Compliance
| Nature of Default | Penalty |
| Late TDS Payment | 1.5% interest per month |
| Late TDS Deduction | 1% interest per month |
| Late Form 26QB Filing | ₹200 per day until filed |
| Non-filing of Form 26QB | Penalty up to ₹1,00,000 (Section 271H) |