TDS on purchase of immovable property New Income Tax rules 2026
Under the new Income-tax Act, 2025 and the corresponding 2026 Rules, the framework for Tax Deducted at Source (TDS) on the purchase of immovable property has been streamlined.
Here are the complete details regarding TDS on immovable property transactions:
1. Applicable Section and Rate
- The TDS provisions for purchasing immovable property (excluding agricultural land) are now consolidated under Section 393(1) [Table: Sl. No. 3(i)] of the new Act, which replaces the old Section 194-IA,,.
- The buyer is required to deduct TDS at a flat rate of 1% on the actual consideration paid for the transfer or the stamp duty value of the property, whichever is higher.
2. Threshold Limit
- TDS is only applicable if the actual consideration for the transfer or the stamp duty value of the property is ₹50 Lakhs or more,.
- To determine if this threshold is met, the consideration is calculated as the aggregate of all amounts paid or payable by all transferees (buyers) to all transferors (sellers) for that property.
3. What is Included in the Consideration? For calculating the TDS, the “consideration for transfer” explicitly includes the property price as well as incidental charges, such as:
- Club membership fees
- Car parking fees
- Electricity or water facility fees
- Maintenance fees
- Advance fees or any other charges of a similar nature incidental to the transfer.
4. New Forms and Deadlines (Form 141)
- TDS on property purchases does not require a standard quarterly TDS return; instead, it uses a specific Challan-cum-TDS statement,.
- For property transactions where the payment or credit occurs on or after April 1, 2026, buyers must file the Challan-cum-TDS statement using the newly introduced Form No. 141, which merges and replaces the old Form 26QB.
- The due date to deposit this TDS is strictly 30 days from the end of the month in which the tax was deducted,.
5. Transition Rules (March vs. April 2026) The governing Act for a transaction depends on the “earlier of the event of credit or payment”.
- If you credit the seller’s account or make the payment on or before March 31, 2026, the transaction is governed by the old Income-tax Act, 1961, and you must use the old Form 26QB,.
- If the payment or credit happens on or after April 1, 2026, the new Income-tax Act, 2025 applies, and you must use the new Form No. 141,.