pri TDS on Sale of Immovable Property | Section 194IA & Form 26QB TDS on Sale of Immovable Property | Section 194IA & Form 26QB

There are various provision related to TDS where tax is to be deducted at source at a given percentage either at the time of payment or at the time of credit, as the case may be e.g. TDS on salary, TDS on professional fees, TDS on Contract, TDS on rent etc. Here, we are going to discuss about TDS on sale of immovable property u/s 194IA and form required to be filled for this i.e. Form 26QB.

Applicability of form 26QB on residents & Non- residents

This provision is applicable on any person, whether a resident or a non-resident buying any immovable property (other than agricultural land) from a resident seller.

Who is required to deduct, threshold limit, time & rate of deduction

Where any person, whether resident or non-resident is buying any immovable property (other than agricultural land) from any resident seller, he shall deduct an amount equal to 1% of the sum, at the time of credit or at the time of payment of such sum, whichever is earlier to the account of the Central Government.

The payment can be made either through cash or by cheque or draft or by any other mode.

However, the provision shall not apply where immovable property is transferred for a consideration of less than Rs. 50 lakhs.

How to deposit tax to government through form 26QB

After TDS is deducted on payment for immovable property, a separate Form 26QB is required to be filed within a period of seven days from the end of the month in which such deduction is made. Form 26QB is a Challan-cum-statement. For filing this form, correct PAN of both the seller and buyer is to be provided.

Where PAN of the deductee is not available, the deductor is required to deduct TDS at higher of the following rates:

  • The rate prescribed in the Act
  • The rate in force
  • At the rate of 20%

After Form 26QB is filed and TDS is deposited to the account of Central Government, an certificate in Form 16B is required to be furnished by the deductor to the deductee within fifteen days from the due date of furnishing of form 26QB. It is generated from the portal The buyer is not required to obtain TAN to deduct TDS and file Form 26QB, PAN is sufficient for the same.

Interest, late fee & Penalty on  form 26QB

Where the deductor either defaults in deduction or payment of TDS to the account of the Central government on or before the due date i.e within seven days from the end of the month in which such deduction is made, then such deductor shall be treated as “assessee in default” and shall be liable to pay interest before furnishing of Form 26QB. Following are the cases where interest is required to be paid.

  • Where TDS has been deducted but not paid: Assessee is required to pay interest at the rate of 1.5% for every month or part of the month on such TDS amount. The interest amount is to be calculated from the date on which such TDS was deducted till the date such TDS is actually paid. 
  • Where no TDS has been deducted: Assessee is required to pay interest at the rate of 1% for every month or part of the month on the amount of such TDS from the date on which such TDS was deductible till the date such TDS is deducted.

Where an assessee is unable to file form 26QB or delay in filing such form beyond the due date, he shall be liable to pay late fee u/s 234E. The late fee is Rs 200 per day for every day during which the failure to furnish the statement continues, however, the total fee cannot exceed the amount of TDS which is required to be deducted mentioned in the statement and this late fee should be deposited before filing of Form 26QB.

What happens to form 26QB in case of Multiple seller & buyers

Where there is involvement of multiple buyers and multiple sellers, then Form 26QB will be filled by all the buyers with respect to each seller for their proportionate share. Let us understand this with the help of an example,

  • Suppose, there is a single buyer and 2 seller, Form 26QB is to be filed by buyers separately for each seller, i.e 2 Form 26QB will be filed. 
  • Suppose, there are 2 buyers and 2 sellers, then 4 Form 26QB is required to be filled separately by both the buyers for both the sellers.

Form 16B indicates the details of tax deducted at source by the buyer of the seller and such deduction is also reflected in 26AS of the seller on the income tax site and seller can claim benefit of such deduction in his income tax return.

What happens in case of payment in installments

Where the payment is made in installments, the deductor is required to deduct TDS on payment of each such installment and submit tax to the government through Form 26QB within a period of seven days from the end of the month in which such deduction is made.

(The author is a CA in practice at Delhi and can be contacted at: E-mail:, Mobile: +91-9811741451))

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Qualification: CA in Practice
Company: Abhinandan Sethia & Associates
Location: west delhi, Delhi, India
Member Since: 26 May 2018 | Total Posts: 45
I am a Practicing Chartered Accountant with over 6 years of professional service experience. My professional services experience include specialization in #GST compliance #Risk based Internal Audits #Risk Management, #business process reviews, #Fraud Investigations etc. among other services View Full Profile

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  1. ASHISH SAHU says:

    Dear sir ,
    please explain difference between section 194 IA and tds/tcs paid from no 26QB.

    if we paid tds us 194 IA rs 150000/- for purchase of land 1,50,00,000/- . Not in form no 26qb.

    ashish sahu

    1. Abhinandanjain says:

      TDS deducted u/s 194IA, is paid to government through form no. 26QB only. It’s a challan cum return statement. So section 194IA requires to deduct TDS and the form in which such TDS is paid is 26QB

  2. says:

    what wil happen if there is two buyers and one seller, total amt. paid will be either full consideration or proportainate amt. of consideration for each buyer ??

  3. Vicky says:

    Your article is written well. I have made a big mess and I wonder if you can provide answers through this medium .

    In case payment is made in installments, does one have to file fresh 26QB each time? In my case, the first time I made payment, I filled out all details for myself (buyer) and the builder (seller). I made the payment and and even downloaded Form 16B and provided to the builder.
    For the second installment, I (foolishly) used “e-tax payment on subsequent date”, entered the previous acknowledgement number and made fresh payment through bank. I now believe this is the incorrect method. How do i correct the same? Do I need to fill up 26QB first and then inform IT Department to adjust payment.

    Greatly disturbed regarding this. Please advise if you can.

  4. Prasanna says:

    Dear sir
    My wife and I have bought a property where there is 1 seller and TDS is 1 lakh. We have to file 26qb twice(same seller and name of each buyer) for 50000 each. Please confirm.

  5. P L Porinchu says:

    There is an unworkable situation. To avail deduction u/s 54F in full the net consideration has to be utilized for the residential house. How is it possible when one percentage of sale consideration is deducted u/s 194IA..Net consideration is worked out by deducting the expenditure in relation to the transfer, but not tax deducted at source.

  6. CA Vinod Kumar jain says:

    Sir,due date for payment of the tax deducted under sec 1941A is last day of the next month from day on which tax is deducted.

  7. krishna says:

    Dear Abhinandan,

    Thanks for the article,

    I have small query, could you please clear it,

    The timeline to submitting the form is 7 days as you mentioned in your article.

    is it 7 days or 30 days ..?

    please correct me.

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