Calculate the mandatory 1% TDS deduction on purchase of immovable property valued at ₹50 Lakhs or more, inclusive of parking and club fees.
Mandatory addition to consideration u/s 194-IA.
Deposit TDS within 30 days from the end of the month in which deduction was made and issue Form 16B to seller.
Under Section 194-IA of the Income Tax Act, 1961, any person (buyer) purchasing immovable property (other than rural agricultural land) from a resident seller for a consideration of ₹50 Lakhs or more must deduct 1% TDS before paying the seller.
As per Finance Act amendment, "Consideration for immovable property" includes all charges nature of club membership fee, car parking fee, electricity/water facility fee, maintenance fee, or any other advance fee paid to the developer/seller.
Buyers do NOT need a Tax Deduction Account Number (TAN). The entire transaction is reported using the Buyer's PAN and Seller's PAN on the Income Tax e-filing portal via Challan-cum-statement Form 26QB. The buyer must then download Form 16B from TRACES and provide it to the seller.
| Parameter | Statutory Specification |
|---|---|
| Threshold Limit | ₹50,00,000 (Fifty Lakh Rupees) |
| Standard TDS Rate | 1% of Higher of (Consideration or Stamp Duty Value) |
| Rate without Seller PAN | 20% under Section 206AA |
| Challan Form | Form 26QB (PAN-based online challan) |
| Certificate for Seller | Form 16B generated from TRACES portal |
| Payment Deadline | Within 30 days from end of the month of deduction |
As per Delhi High Court rulings, if the total property value exceeds ₹50 Lakhs, Section 194-IA applies even if individual shares of co-buyers/co-sellers are below ₹50 Lakhs. Separate Form 26QB must be filed for each buyer-seller combination.
No. If the seller is an NRI, TDS is governed under Section 195 (at 20% / 12.5% plus surcharge and cess) with mandatory TAN requirement, not Section 194-IA.
TDS must be deducted proportionately (1%) from each installment paid to the builder if the total agreement value exceeds ₹50 Lakhs. A separate Form 26QB is filed for every payment.