A.) TDS on Property Purchases from 1 April 2026: Forms, Threshold, Deadlines, and Mistakes
Buying a property is more than just a financial commitment. While factors such as location, price, and growth potential are important, tax compliance also plays a crucial role in ensuring a hassle-free property purchase.
From 1 April 2026, property buyers (be it joint/co-owner or individual) who are residents of India have seen important procedural changes in how Tax Deducted at Source (TDS) on applicable immovable property transactions (where the sale consideration or stamp-duty value, whichever is higher, is Rs.50 lakh or more) is reported and documented under the Income-tax Act, 2025.
While the fundamental TDS rate and threshold for applicable transactions remain unchanged, the compliance process, including the reporting structure, forms, and documentation, has been revised under the new framework.
Here is a simple yet comprehensive look at what these changes mean for property buyers.
The Income-tax Act, 2025, introduces revised TDS compliance requirements for specified immovable property transactions under Section 393.
For buyers, the biggest change is not the TDS amount payable, but how the transaction is reported and how the TDS certificate is issued.
TDS applies where the sale consideration or stamp-duty value of the property, whichever is higher, is Rs.50 lakh or more, subject to the applicable conditions. To clarify, the 1% is calculated on the applicable full base, not only on the amount above Rs.50 lakh.
Sales consideration typically includes the following:
Under the earlier system, buyers were required to use Form 26QB to report and deposit TDS on applicable property purchases to be deducted at the earlier of credit of the amount to the seller’s account or payment to the seller, as applicable, based on their ownership percentage in the property being purchased, using their PAN (Permanent Account Number) at various stages based on demands being generated by the seller/developers.
From 1 April 2026, this process moves to Form 141 – Challan-cum-Statement, with Schedule B specifically covering TDS on the transfer of immovable property. The new form brings property TDS reporting into a more structured and detailed framework.
The new form captures important transaction-level information, including:
This means property buyers need to ensure that the information reported in the form accurately reflects the underlying transaction and supporting property documents.
The TDS certificate process has also been revised under the new framework.
Earlier, buyers were required to obtain Form 16B as the TDS certificate for applicable property transactions. From 1 April 2026, Form 132 replaces Form 16B for such transactions. Form 132 is a consolidated TDS certificate covering specified transactions, including the transfer of immovable property.
In simple terms:
The buyer's TDS statement on property transfers (earlier Form 26QB) is now Form 141, and the certificate issued to the seller (earlier Form 16B) is now Form 132.
3. Comprehensive Reporting for Joint Transactions
The new reporting structure provides greater visibility into individual ownership and transaction shares.
Form 141 captures the relevant percentage allocation of buyers and sellers, along with other transaction-specific information. In joint transactions, buyers should ensure that the ownership percentages and relevant payment allocations are accurately recorded.
This detailed reporting helps ensure that the TDS information correctly reflects the structure of the property transaction.
Many residential properties, particularly under-construction homes, are purchased through a series of installment payments.
The new Form 141 framework specifically accommodates installment-based payments and requires that relevant details be captured for each installment. For subsequent or final installments, the form also provides for reference to the previous acknowledgement number, where applicable. For homebuyers, this reinforces the importance of maintaining a clear record of:
Payment Date → Installment Amount → TDS Deduction → TDS Payment → Acknowledgement
Keeping these records well organized can make future compliance and documentation easier.
A periodic review/verification is recommended to ensure that the deduction appears correctly in the seller’s tax records, such as Form 26AS/AIS, when available, and the checkpoints are not limited to the following:
While the compliance process has undergone a significant change, certain key parameters that matter most to property buyers remain unchanged.
For eligible purchases of immovable property, the TDS rate remains 1%, subject to applicable provisions and conditions.
The new framework changes the reporting and documentation process; it does not alter the basic TDS rate applicable to qualifying property transactions.
The TDS requirement for the applicable transfer of immovable property continues to apply where the sale consideration is Rs. 50 lakh or more, subject to the provisions of the law.
Therefore, buyers involved in transactions meeting the applicable threshold must pay particular attention to TDS compliance. The Income Tax Department's Form 141 guidance specifically states that TDS is required where the property value exceeds Rs.50 lakh for the relevant Schedule B transaction.
The deducted TDS must be paid to the credit of the Central Government, and Form 141 must be furnished within 30 days from the end of the month in which the deduction is made.
Missing the prescribed timeline can result in additional interest, fees, or other consequences under the applicable tax provisions.
Here is a snapshot of our above detailed guideline:
Before processing payments, check whether the transaction falls within the applicable TDS provisions and whether the Rs.50 lakh threshold is met.
Understanding the applicability of TDS at the outset can help prevent compliance issues later.
The new reporting framework places greater emphasis on correctly capturing transaction values.
Ensure that the sale consideration and stamp duty value reported in Form 141 accurately correspond with the relevant property documents. The form specifically requires these values to be captured as part of the transaction details.
If the purchase consideration is being paid in installments, maintain a clear record of every payment and the corresponding TDS deduction.
A simple record of the payment date, installment amount, TDS deducted, TDS payment, and acknowledgement can help maintain a transparent transaction trail.
For jointly purchased properties, correctly record ownership percentages and relevant payment allocations.
Buyers should ensure that the information provided for all parties accurately reflects the transaction structure.
Forms, challans, payment records, acknowledgements, and TDS certificates should be retained as part of the property transaction records.
These documents are beneficial for official future reference, reconciliation, and tax compliance.
The revised TDS framework marks a significant change in how applicable property transactions are reported and documented from 1 April 2026.
While the 1% TDS rate and ₹50 lakh threshold remain applicable to qualifying transactions, the transition from Form 26QB to Form 141 and from Form 16B to Form 132 places greater emphasis on accurate reporting, transaction-wise tracking, and proper documentation.
For property buyers, understanding these procedural changes and maintaining accurate transaction records can help make the homebuying journey more organized and compliant.
Form 141 – detailed guideline from the income tax portal:
https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/form-141-challan-cum-s
FAQ from the income tax portal for filing Form 141 and related requirements:
Form 132 – link from the income tax portal to review contents before sharing with the seller/developer:
https://www.incometaxindia.gov.in/w/form-no.-132
Disclaimer: This article is provided for general consumer awareness and does not constitute detailed context of applicable tax rules/procedures; hence, it should not be construed as legal or financial advice. Applicability, tax base, seller residency, valuation, forms, due dates, and consequences may vary according to the transaction and subsequent amendments or departmental directions/judicial decisions from time to time. Buyers/customers should verify the latest information on the official Income Tax Department portal and consult a qualified tax professional before making payment.
At Radiance Realty, we believe a hassle-free, seamless home-buying experience goes beyond delivering quality homes. It is also about helping homebuyers navigate every step of their property-buying journey with great confidence and clarity.
For queries about property purchases in these articles, contact us.
Radiance Realty Developers India Ltd.
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