Form 26QB is a mandatory challan-cum-statement prescribed under Section 194-IA of the Income Tax Act, 1961 for reporting and depositing Tax Deducted at Source (TDS) on the purchase of immovable property.
The responsibility to deduct and deposit TDS is cast on the buyer of the property, not on the seller. This provision was introduced to track high-value real estate transactions and ensure tax compliance at the transaction stage itself.
Applicability of Section 194-IA and Form 26QB
Any individual or Hindu Undivided Family (HUF) purchasing immovable property for ₹50 lakh or more is required to comply with TDS provisions under Section 194-IA.
Transactions Covered
TDS is applicable on the purchase of:
- Residential property
- Commercial property
- Land
- Under-construction property
Transactions Excluded
- Agricultural land, subject to conditions discussed later.
Threshold Limit and Basis of TDS Calculation
Monetary Threshold
TDS provisions apply only where the sale consideration or stamp duty value is ₹50 lakh or more.
Value on Which TDS Is Deducted
- TDS is deducted on the entire value of the property, not merely on the amount exceeding ₹50 lakh.
- Where stamp duty value exceeds the agreed sale consideration, TDS must be calculated on the stamp duty value, as mandated by law.
Important Clarification
This provision prevents undervaluation of property for tax purposes and ensures uniform tax treatment.
Rate of TDS and Time of Deduction
- Applicable Rate of TDS: 1%
- TDS must be deducted at the time of payment or at the time of credit of consideration to the seller, whichever is earlier
If the total transaction value is below ₹50 lakh, no TDS deduction is required.
Illustration for Better Understanding
If a buyer purchases a property for ₹60 lakh, but the stamp duty value is ₹65 lakh, then:
- TDS @1% will be calculated on ₹65 lakh
- TDS amount = ₹65,000
- Net amount payable to seller = ₹59.35 lakh
This ensures that tax is deducted on the higher of the two values.
Information and Documents Required for Filing Form 26QB
To file Form 26QB accurately, the following details must be furnished:
- PAN of buyer and seller (mandatory)
- Full address and contact details of both parties
- Details of the immovable property
- Sale consideration and payment details
- Date of agreement and date of payment
- Amount of TDS deducted and deposited
Incorrect PAN details may result in rejection or mismatch of TDS credit.
Key Compliance Conditions under Section 194-IA
TAN Not Required
- The buyer is not required to obtain a Tax Deduction Account Number (TAN).
- Only PAN of buyer and seller is mandatory, making compliance simpler for individuals.
Multiple Buyers or Sellers
- Each buyer–seller combination requires a separate Form 26QB.
- This ensures correct reporting and accurate credit of TDS to each seller.
Payment in Installments
- TDS must be deducted proportionately on each installment.
- Deduction cannot be deferred until the final payment.
Issuance of Form 16B (TDS Certificate)
- After depositing TDS, the buyer must download Form 16B from the TRACES portal.
- Form 16B must be issued to the seller within 15 days from the date of filing Form 26QB.
- This certificate serves as proof of tax deduction for the seller.
Agricultural Land – Detailed Explanation of Exemption
TDS provisions under Section 194-IA do not apply to agricultural land. However, land will be treated as non-agricultural if:
Location-Based Conditions
The land is situated:
- Within municipal or cantonment limits having a population exceeding 10,000, or
- Within the specified distance from such limits, based on population:
- Up to 2 km where population is 10,000–1,00,000
- Up to 6 km where population is 1,00,000–10,00,000
- Up to 8 km where population exceeds 10,00,000
Such land will attract TDS provisions despite being described as agricultural.
Detailed Procedure to File and Pay TDS Using Form 26QB
- Log in to the Income Tax e-Filing Portal using PAN credentials.
- Navigate to e-File → e-Pay Tax → New Payment → 26QB (TDS on Sale of Property).
- Enter buyer, seller, and property details carefully.
- Provide tax payment and TDS details.
- Choose the mode of payment – net banking, debit card, RTGS/NEFT.
- Complete payment and download the challan acknowledgement.
- Download Form 16B from the TRACES portal once the statement is processed.
Authorized Banks for TDS Payment
TDS payment through Form 26QB can be made via authorized banks, including:
- State Bank of India
- HDFC Bank
- ICICI Bank
- Axis Bank
- Canara Bank
- Union Bank of India
- Bank of Baroda
- Punjab National Bank
- Other notified banks
How the Seller Can Verify TDS Credit
- TDS deducted is reflected in Part F of Form 26AS of the seller
- The seller can claim this TDS credit while filing the Income Tax Return
Any mismatch should be immediately addressed with the buyer.
Interest and Penalties for Non-Compliance
| Nature of Default | Legal Consequence |
| Delay in filing Form 26QB | ₹200 per day (Section 234E) |
| Failure to deduct TDS | Interest @1% per month |
| Failure to deposit deducted TDS | Interest @1.5% per month |
| Non-filing of statement | Penalty from ₹10,000 to ₹1,00,000 (Section 271H) |
Responsibilities of the Seller
- Ensure correct PAN is shared with the buyer
- Verify TDS credit in Form 26AS
- Claim TDS while filing the Income Tax Return
Responsibilities of the Buyer
- Deduct TDS correctly at 1%
- Verify PAN details of the seller
- File Form 26QB within the due date
- Issue Form 16B to the seller on time
Due Date for Filing Form 26QB
Form 26QB must be filed within 30 days from the end of the month in which TDS is deducted.
Example
If payment towards property purchase is made on 20 September 2025, Form 26QB must be filed on or before 30 September 2025.