Buying a property from a resident seller now uses the Income-tax Act, 2025 framework for payments or credits on or after 1 April 2026. The familiar old-law section 194-IA has been replaced for these transactions by section 393(1), Table serial number 3(i), while the compliance form has changed from Form 26QB to the unified Form 141. The core 1% property-TDS concept remains, but buyers should use the new section and form for current transactions.
The Income Tax Department text of section 393 and the Department's Form 141 FAQ are the key first-party references for current compliance.
When does TDS apply on purchase of property?
For consideration paid for transfer of immovable property other than agricultural land to a resident seller, section 393(1), Table serial number 3(i), prescribes TDS at 1% of the higher of the transfer consideration or the stamp duty value. The threshold is ₹50 lakh. The statutory notes also aggregate amounts paid or payable where there is more than one transferor or transferee, so splitting ownership among multiple buyers or sellers does not by itself avoid the threshold test.
The rule is for payments to a resident seller. The Form 141 FAQ expressly says Form 141 cannot be filed where the deductee is non-resident. A buyer dealing with a non-resident seller should therefore not apply this property-TDS workflow mechanically and should determine the applicable non-resident withholding provisions separately.
Form 141 has replaced Form 26QB for current transactions
The Income Tax Department explains that Form 141 consolidates the earlier PAN-based challan-cum-statements, including Form 26QB for property purchases. For an event of credit or payment occurring on or after 1 April 2026, the new Act applies and the buyer should use Form 141. The Department's TDS transition guidance specifically says that payments or credits on or after 1 April 2026 are governed by the corresponding withholding provisions of the Income-tax Act, 2025.
Form 141 is available through PAN login on the e-Filing portal. For property transactions, the relevant property-transfer schedule asks for transaction details such as the type and address of property, agreement information and payment details. The Department also provides a step-by-step Form 141 user manual.
When should the buyer deduct and deposit the tax?
Section 393 generally uses the earlier of credit or payment as the withholding trigger. For Form 141 transactions, the Income Tax Department states that the deducted amount must be paid to the Central Government within 30 days from the end of the month in which tax is deducted. The Form 141 statement is also required within one month from the end of that month.
This timing matters particularly for instalment-based purchases. A buyer should not assume that all TDS can simply be postponed until registration if consideration is credited or paid earlier. The deduction point must be evaluated against the actual payment and credit events.
Worked example
Assume a resident individual buys a flat from a resident seller for ₹72 lakh and the stamp duty value is ₹75 lakh. The relevant base is the higher amount, ₹75 lakh. At 1%, the total TDS attributable to the transaction is ₹75,000, subject to the timing of the actual credits or payments. If an instalment triggers deduction in August 2026, the corresponding Form 141 payment and statement should be completed within the prescribed period measured from the end of August.
Now assume the agreed consideration is ₹48 lakh but the stamp duty value is ₹52 lakh. The buyer should not conclude that TDS is outside the provision merely because the negotiated price is below ₹50 lakh. The statutory test and rate refer to the consideration and stamp duty value, and the current provision applies the 1% rate to the higher of the two when the threshold conditions are met.
What if there are multiple buyers or sellers?
The current section 393 notes prevent a fragmented threshold analysis. For purposes of the property threshold, consideration is aggregated where there is more than one transferor or transferee. Accordingly, co-buyers should first test the total transaction and then ensure the filing/payment mechanics correctly reflect the parties involved rather than treating each person's share as a separate property for deciding whether TDS applies.
Common mistakes to avoid
- Using Form 26QB for a post-1 April 2026 transaction: current PAN-based property TDS is reported through Form 141 under the new Act.
- Checking only the sale agreement value: the TDS rate is applied to the higher of consideration or stamp duty value under the current provision.
- Ignoring joint ownership: the threshold test uses aggregated consideration where multiple transferors or transferees are involved.
- Using the resident-seller form for a non-resident seller: Form 141 is not available for a non-resident deductee.
- Waiting until registration without checking earlier payments: the withholding trigger is linked to the earlier of credit or payment.
- Missing the post-deduction timeline: Form 141 and the tax payment have a specific end-of-month-based deadline.
Buyer checklist before making a property payment
- Confirm whether the seller is resident or non-resident for withholding purposes.
- Compare the agreed consideration with the stamp duty value and test the ₹50 lakh threshold.
- If there are multiple buyers or sellers, assess the aggregate consideration for the property.
- Identify the date of each credit or payment so the deduction point is documented.
- For transactions governed by the new Act, use section 393(1), Table serial number 3(i), and Form 141 rather than the old 194-IA/26QB labels.
- Keep PAN details, agreement information, property details, payment records and challan/statement acknowledgements together in the transaction file.
- After filing, retain the confirmation and obtain the TDS certificate through the applicable TRACES process.
Practical takeaway
For a current purchase from a resident seller, the safest workflow is to test the ₹50 lakh threshold using both consideration and stamp duty value, apply 1% to the higher value where the provision applies, identify the correct deduction date, and complete Form 141 within the prescribed timeline. The biggest 2026 compliance trap is relying on an old checklist that still says section 194-IA and Form 26QB without first checking whether the payment or credit occurred before or after 1 April 2026.
