East Bengaluru buyer answers

How does TDS on property purchase work from 1 April 2026?

By Gaurav Mongia, acre&key · Published 16 Oct 2026 · Updated 16 Oct 2026

Direct answer: For payments made on or after 1 April 2026, a buyer deducts TDS on a property purchase under Section 393(1), Table serial 3(i), of the Income-tax Act, 2025. The rate is 1% of the price or the stamp duty value, whichever is higher, once either reaches ₹50 lakh. The buyer reports it on Form 141, Schedule B.

Disclosure: acre&key’s advice is free to buyers; we are an authorised sales partner for some projects and may be paid by the developer.

Verify with your CA: This page explains the law as published, not tax advice. Before you deduct or file anything, have your own chartered accountant confirm the rate, the value to use and the filing for your specific purchase.

If you bought a flat in Bengaluru before this year, you probably remember "194-IA" and "Form 26QB". Both labels are retired for new payments, but the duty to deduct hasn't gone anywhere. It's moved into a new Act and onto a different form. This page covers the resident-seller case, which is what applies when you buy from a builder or from a resident individual. Buying from a non-resident? Different rules apply, so talk to a chartered accountant before you pay anything. TDS is one of several costs on top of the base price; our page on hidden costs beyond the base price covers the rest.

What actually changed on 1 April 2026?

The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. The Income Tax Department's guidance says the law that applies depends on the date of the earlier of two events, credit or payment. If that fell on or before 31 March 2026, the old Act applies. If it falls on or after 1 April 2026, the new Act applies. The department also says contracts don't need amending just because the new Act has started (Income Tax Department, TDS compliance).

Here's how the old section maps to the new one:

Sources: Section 393 text, Form 141 note, Form 141 FAQs.

Does the 1% apply to the price or the guidance value?

Whichever is higher. Serial 3(i) sets the rate at "1% of (a) consideration for transfer of the immovable property; or (b) stamp duty value of such property, whichever is higher" (Section 393).

On the eastern edge of the city, this one bites. In places like Hoskote or Budigere, a negotiated price can sometimes fall below the government's guidance value for the same property. Your 1% is then worked out on the guidance-based stamp duty value, not on the cheque amount. Look up the guidance value for your property on Karnataka's Kaveri portal before you calculate. On that edge it's also worth confirming whether the project sits under the city corporation or a gram panchayat; our page on checking BBMP or panchayat jurisdiction shows how.

When does the ₹50 lakh threshold kick in?

Note 3 under the table says tax is deducted where the consideration or the stamp duty value "is equal to or greater than fifty lakh rupees". Note 1 adds that the threshold is tested on the total paid by all buyers to all sellers. So if you and your spouse each pay half of a ₹60 lakh flat, the property as a whole crosses the line. Your separate halves don't escape it (Section 393, Notes 1 and 3).

A few examples, using nothing but that rule:

• A ₹48 lakh flat whose stamp duty value is also under ₹50 lakh: no TDS under this serial.
• A ₹48 lakh flat whose stamp duty value is ₹52 lakh: TDS applies, at 1% of ₹52 lakh.
• A ₹1.2 crore flat bought jointly by two buyers: TDS applies to the whole consideration, and each buyer deducts on the share they pay. The department's FAQs say each deductor files a separate Form 141 for their proportionate share.

When do I deduct for an under-construction flat paid in instalments?

The table's general rule is that tax is deducted "at the time of credit of such income or sum to the account of the payee or at the time of its payment… whichever is earlier" (Section 393(1)(c)). For a flat paid in stages, that points to deducting on each instalment as you pay it, not in one lump at registration.

On filing, the Form 141 FAQs help: one form can cover several transactions of the same nature with the same month of deduction, but payments deducted in different months can't be clubbed into one form (Form 141 FAQs, Q14). So two instalments in October can go on one filing; an October and a December instalment need two. If your payments follow construction stages, our page on construction-linked vs time-linked payment plans explains how those demands usually arrive.

If your bank pays the builder directly from your loan, the deduction is still your duty as the buyer. Ask the bank how it handles this, and agree with your CA and the builder's accounts team how the TDS on loan disbursements will be covered before the first demand letter arrives.

How do I file Form 141 for a flat purchase?

Form 141 is a PAN-based "challan-cum-statement". One form covers four kinds of transaction, and Schedule B is the one for buying immovable property. It replaces the old 26QB. You file it with your PAN, so you don't need a TAN (Form 141 note; Form 141 FAQs, Q7).

The deadline in the department's note is "within 30 days from the end of the month in which the deduction is made". Deduct on 10 October, and the filing is due by 30 November. The note describes the steps as logging in to the e-filing portal with your PAN, going to "e-Pay Tax", choosing the schedule, filling in the details and paying online.

Keep these ready before you start:

1. Your PAN and the seller's PAN. With a builder, that's the PAN of the company or LLP issuing the demand.
2. Address, mobile number and email ID for both sides.
3. The property value and the stamp duty value, where it's higher than the price.
4. The date and amount of every payment you're deducting on.

Late filing attracts a late fee under section 427, and late deduction or payment attracts interest under section 398(3)(a) of the 2025 Act (Form 141 FAQs, Q21–22).

What about the TDS certificate to the seller?

Form 16B is gone for new payments. Once your Form 141 is processed, you download the TDS certificate in Form No. 132 from TRACES and give it to the seller. The department's note says the certificate must be issued within 15 days from the due date of filing Form 141. The seller then sees the credit in their annual information statement, Form No. 168 (Form 141 note).

Which TDS mistakes are easy to make on an East Bengaluru purchase?

These are the slips I'd watch for:

• Treating the agreement value as final when the stamp duty value is higher.
• Leaving out car parking, clubhouse or other amounts that are part of the consideration. Ask your CA which cost-sheet lines count.
• Using the old 26QB route out of habit for a payment made after 1 April 2026.
• Not keeping the challan and acknowledgement. You'll want them for every instalment, and the builder's accounts team will often ask for proof.
• Getting the seller's PAN wrong. The FAQs say the credit then won't reach the seller, and a higher rate can apply.

Frequently asked questions

Is TDS on property still 1% after the new Income-tax Act?

Yes, for a resident seller. Section 393(1), Table serial 3(i), keeps the rate at 1%, now calculated on the higher of the consideration and the stamp duty value.

I paid one instalment in March 2026 and another in May. Which law applies?

The March payment falls under the 1961 Act and Form 26QB. The May payment falls under the 2025 Act and Form 141. The department's rule turns on the date of the earlier of credit or payment.

Does TDS apply if the flat costs less than ₹50 lakh?

Not under this serial, as long as both the price and the stamp duty value are below ₹50 lakh. If either reaches ₹50 lakh, it applies.

Does an NRI seller change any of this?

Yes. Section 393(1) covers payments to residents. Payments to non-residents fall under a different part of the section with different rules, so take advice from a CA before paying an NRI seller.

Who deducts TDS when I buy from a builder?

You, the buyer. The builder is the payee, and the duty to deduct sits with the person making the payment.

Which certificate do I give the seller now?

Form No. 132, which you download from TRACES after your Form 141 is processed. The department's note says to issue it within 15 days of the Form 141 due date.

References

1. Income Tax Department, Section 393, Income-tax Act, 2025. https://www.incometaxindia.gov.in/w/section-393-6, accessed 15 Oct 2026.
2. Income Tax Department, Form No. 141 note (purpose, due date, Form 132 certificate). https://www.incometaxindia.gov.in/documents/d/guest/fn-141, accessed 16 Oct 2026.
3. Income Tax Department, Form No. 141 FAQs. https://www.incometaxindia.gov.in/documents/d/guest/form-141-faqs, accessed 16 Oct 2026.
4. Income Tax e-filing portal, TDS compliance help. https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/tds-compliance, accessed 16 Oct 2026.
5. Karnataka Kaveri portal (guidance value and registration). https://kaveri.karnataka.gov.in/, accessed 15 Oct 2026.