Section 194-IA 1% TDS on Property Purchase Exceeding ₹50 Lakhs: Form 26QB Filing

Under Section 194-IA of the Income-tax Act, 1961, any person purchasing immovable property (other than agricultural land) for a consideration of ₹50 Lakhs or more is statutorily required to deduct 1% Tax Deducted at Source (TDS) from the payment made to the resident seller.

1. Threshold & Calculation on Stamp Duty Value

Following statutory amendments:

• Comparison Metric: TDS is calculated at 1% on the higher of actual sale consideration or Stamp Duty Value (Guideline Value).
• Inclusion of Incidental Charges: All ancillary payments made to the builder/seller—such as club membership fees, car parking charges, electricity/water infrastructure fees, and maintenance advance—must be clubbed into the total consideration for testing the ₹50 Lakh threshold and deducting 1% TDS.
• Multiple Buyers / Sellers: Even if an individual co-buyer's share is less than ₹50 Lakhs, if the aggregate property value is ₹50 Lakhs or more, 1% TDS applies proportionately to all buyers and sellers.

2. Filing Form 26QB & Generating Form 16B

Unlike standard commercial TDS:

• The buyer does not require a TAN (Tax Deduction Account Number). The deduction is filed using the buyer and seller's PANs.
• Challan-cum-Statement (Form 26QB): Must be filed electronically on the Income Tax e-filing portal within 30 days from the end of the month in which the deduction was made.
• Form 16B Certificate: After processing of Form 26QB, the buyer must log into the TRACES portal (tdscpc.gov.in), download Form 16B, and deliver it to the seller within 15 days of filing.

3. Penalties for Default

• Interest under Section 201(1A): 1% per month for delay in deduction; 1.5% per month for delay in deposit.
• Late Filing Fee under Section 234E: ₹200 per day of continuous delay in filing Form 26QB, up to the total TDS amount.

For property purchase tax due diligence, Form 26QB filings, and registry coordination in Raipur, contact Rabi Agrawal & Associates.