How does Brickplot use TDS on Property Purchase in its scoring?

Brickplot's 11-axis score evaluates every project against legal, financial, technical, RERA, and process dimensions — including tds on property purchase. You can see a project's breakdown on any Brickplot review page.

Financial

TDS on Property Purchase

Q: Why does TDS on Property Purchase matter when buying property in India?

TDS on Property Purchase is a financial concept that affects your property purchase decision. Tax Deducted at Source under Section 194IA — buyer must deduct 1% TDS on property purchases above Rs 50 lakh and deposit with Income Tax department within 30 days using Form 26QB. Brickplot checks this as part of the independent 11-axis review process.

Tax Deducted at Source under Section 194IA — buyer must deduct 1% TDS on property purchases above Rs 50 lakh and deposit with Income Tax department within 30 days using Form 26QB.

What is TDS on Property?

Under Section 194IA of the Income Tax Act, 1961, any buyer purchasing an immovable property (other than agricultural land) for a consideration of Rs 50 lakh or more must deduct TDS (Tax Deducted at Source) at the rate of 1% of the total consideration and deposit it with the Income Tax department. This is not an additional cost — it is deducted from the payment made to the seller and deposited on their behalf, adjusting against the seller income tax liability.

How to File and Pay TDS (Form 26QB)

Go to the TIN NSDL website (tin.tin.nsdl.com) or the new IT portal (incometax.gov.in)
Select Form 26QB — Payment of TDS on Sale of Property
Enter buyer PAN, seller PAN, property details, sale consideration, and TDS amount
Confirm and generate payment challan
Pay online through net banking within 30 days of payment to seller
Download the acknowledgement (Form 26QB challan)

After depositing TDS, issue Form 16B (TDS certificate) to the seller within 15 days of the due date for deposit. The seller uses Form 16B to claim credit for TDS deducted when filing their income tax return.

Consequences of Non-Compliance

Failure to deduct or deposit TDS on a property purchase has serious consequences for the buyer:

Penalty equal to the TDS amount not deducted (Section 271C)
Interest at 1% per month from the date TDS was due to be deducted to the date it was actually deducted
Interest at 1.5% per month from the date TDS was deducted to the date it was deposited
In extreme cases, the buyer can be treated as an "assessee in default" and face prosecution

NRI Seller: Higher TDS

When the seller is a Non-Resident Indian (NRI), the TDS rate is significantly higher under Section 195:

Short-term capital gain (property held less than 24 months): TDS at income slab rate, typically 30%
Long-term capital gain (property held 24+ months): TDS at 12.5% (without indexation) or 20% with indexation
Additional surcharge and cess apply, making effective TDS 20–22.88%

NRI sellers can apply for a lower TDS certificate from their IT assessing officer if the actual tax liability will be less.

How Brickplot Uses This

Brickplot includes TDS compliance as a reminder in our Possession Checklist feature. For projects near possession, buyers see a TDS reminder with the applicable rate and link to the Form 26QB filing portal.

Related Terms

Stamp Duty — another transaction tax on property purchase
Registration Charges — paid alongside stamp duty at registration
Capital Gains Tax — the seller tax liability that TDS partially covers

Brickplot verifies tds on property purchase disclosures on every reviewed project as part of the independent 11-axis score. No builder commissions. No editorial override.

Search scored projects →← All glossary terms