TDS on buying property in India: the 1% rule, Form 141 and Form 132
On this page
- Section 393(1), Income-tax Act 2025 - Consolidated TDS on Property/Rent/Contractors
- Form 141 - Consolidated Challan-cum-Statement (Property/Rent/Contractor/VDA TDS)
- Official Form 141 FAQs - Transition from Form 26QB/26QC/26QD/26QE
- Form 132 - Consolidated TDS Certificate (successor to Form 16B/16C/16D/16E)
- Do I Need TDS if the Property is Under Rs 50 Lakh, or Split Between Buyers?
- What If the Seller Doesn't Have a PAN?
- What Happens if I Don't File Form 26QB/141 on Time?
- Section 197 - Certificate for Lower or Nil TDS Deduction
Section 393(1), Income-tax Act 2025 - Consolidated TDS on Property/Rent/Contractors
The new Act merges old Sections 194-IA, 194-IB, 194-I plus contractor/professional TDS into one Section 393(1), reported on one Form 141. The 1% rate and Rs 50 lakh threshold for property from a resident are unchanged - only the paperwork changed.
- Consolidates 194-IA, 194-IB, 194-I and contractor/professional/VDA TDS with different 'nature codes'
- Property from a resident: still 1% above Rs 50 lakh, via Form 141
- Resident deductees only - non-resident payments sit under Section 393(2)
- TDS certificate now Form 132, via TRACES
Section 393(1), Income-tax Act 2025 · Status: in force · official source
Form 141 - Consolidated Challan-cum-Statement (Property/Rent/Contractor/VDA TDS)
The new all-in-one TDS form replacing Forms 26QB, 26QC, 26QD and 26QE. For property, the rate and threshold are unchanged (1% above Rs 50 lakh) - only the form and reporting detail changed.
- Replaces 26QB, 26QC, 26QD, 26QE
- Filed under Section 393(1); resident deductees only
- Requires party-wise PAN and percentage share for joint buyers/sellers (must total 100%)
- Payment/filing due within 30 days from month-end of deduction
Form 141, filed under Section 393(1), Income-tax Act 2025 · Status: in force · official source
Official Form 141 FAQs - Transition from Form 26QB/26QC/26QD/26QE
The e-filing portal's own FAQ walks through how the consolidated Form 141 works - who files it, what it replaces, and its schedules for property, rent, contractors and VDAs.
- Form 141 merges 26QB (property), 26QC (rent), 26QD (contractor u/s 194M), 26QE (VDA) into one form
- Filed under Section 393(1); resident deductees only - non-residents use Section 393(2)
- FY2025-26 transactions (to 31 Mar 2026) still use old forms; Form 141 applies from Tax Year 2026-27
- Certificates are now Form 132, via TRACES
Form 141 FAQs, Income Tax e-Filing Portal · Status: in force · official source
Form 132 - Consolidated TDS Certificate (successor to Form 16B/16C/16D/16E)
The new consolidated TDS certificate replacing Forms 16B, 16C, 16D and 16E, issued after Form 141 filing and downloaded from TRACES.
- Replaces Form 16B (property), 16C (rent), 16D (contractor), 16E (VDA)
- Issued within 15 days of Form 141's due date
- Downloadable via TRACES
Form 132 · Status: in force · official source
Do I Need TDS if the Property is Under Rs 50 Lakh, or Split Between Buyers?
No TDS if the total price is genuinely below Rs 50 lakh. But since October 2024 you can't dodge it by splitting payments across multiple buyers/sellers - all payments in the deal are added together for the threshold test.
- No TDS if total consideration is below Rs 50 lakh
- Since the Finance (No.2) Act 2024 amendment (1 Oct 2024), payments by/to ALL parties in one deal are aggregated
- Closed the loophole of co-owners each paying just under Rs 50 lakh
- Same aggregation expected to continue under Section 393(1)/Form 141
Section 194-IA / Section 393(1), Income-tax Act 1961 / 2025 · Status: in force · official source · full answer
What If the Seller Doesn't Have a PAN?
Without a valid PAN, the buyer must deduct TDS at 20% instead of the usual 1%, and Form 26QB/141 can't be processed correctly without it. Always insist on the seller's PAN.
- TDS at 20% instead of 1% under Section 206AA if no valid PAN
- Form 26QB/141 needs both parties' valid PAN to file correctly
- Higher TDS under Section 206AA can similarly hit NRI sellers without PAN
- Verify PAN validity before finalising the deal
Section 206AA, Income-tax Act 1961 · Status: in force · official source · full answer
What Happens if I Don't File Form 26QB/141 on Time?
Missing the 30-day property TDS deadline costs interest on the late payment plus a daily late fee, and in serious cases a penalty. It's a common, avoidable mistake for first-time buyers who don't realise TDS is their job, not the seller's.
- Interest under Section 201(1A): 1%/month for late deduction, 1.5%/month for late deposit
- Late fee under Section 234E: Rs 200/day, capped at the TDS amount
- Penalty under Section 271H: Rs 10,000 to Rs 1,00,000 for continued non-compliance
- The BUYER, not the seller, is responsible for deducting and depositing this TDS
Sections 201(1A), 234E, 271H, Income-tax Act 1961 · Status: in force · official source · full answer
Section 197 - Certificate for Lower or Nil TDS Deduction
If default TDS would deduct far more than your real liability - very common for NRI sellers, since it often applies to the whole price not just the gain - you can apply in Form 13 to the Assessing Officer for a lower/nil deduction certificate.
- Applied for online in Form 13, to the jurisdictional Assessing Officer (International Taxation ward for NRIs)
- Widely used by NRI sellers to avoid excess TDS locking up cash until refund
- Certificate specifies the correct lower rate/amount for the buyer to deduct
- Processed via the TRACES portal; new Form 13 number under the 2025 Act not confirmed
Section 197, Income-tax Act 1961 · Status: in force · official source
Work out your own numbers
Open the CAPGAIN calculatorsGeneral information for India, not advice on your facts. Where an entry says a point is not yet confirmed under the Income-tax Act 2025, treat it as open.