Buying a dream home comes with its own set of tax responsibilities. One such responsibility is Section 194-IA, which requires the buyer to deduct and pay TDS to the government when purchasing property worth ₹50 Lakhs or more.

Rules for 1% TDS (Section 194-IA)

If you are buying any immovable property (land or building) from a resident Indian:

  • Threshold: ₹50 Lakhs or more (includes club-house fees, parking, etc.).
  • Rate: 1% of the total consideration.
  • Deadline: Deposit must be made within 30 days from the end of the month in which deduction is made.
  • Form 26QB: Use this form to deposit the TDS online.

Buyer Beware: Risks of Non-Compliance

If the buyer fails to deduct or deposit this tax, they are liable for interest and heavy penalties. More importantly, the property registration might be flagged by the income tax cell.

Critical Note: If you are buying from an NRI, the rules are different! You may need to deduct up to 20% TDS under Section 195. Expert advice is highly recommended.

At Paras Finance, we simplify the property TDS process for you. From calculating the correct tax to filing Form 26QB and issuing Form 16B to the seller, we handle it all. Contact us for a seamless property transaction.