TDS on sale of property: Form 141 (formerly Form 26QB) explained
Whenever immovable property changes hands for ₹50 lakh or more, the buyer — not the seller — is legally required to deduct 1% TDS and report it to the government. From 1 April 2026 this is done through a new form, Form 141, under a renumbered section of a brand-new tax law — the Income-tax Act, 2025. The rate and threshold haven't changed, but the form, the section number and a few procedural details have. Here's exactly what buyers and sellers need to know now.
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Who deducts, and when it applies
From 1 April 2026, TDS on the sale of immovable property — land, a building, or part of a building — other than agricultural land, is governed by Section 393(1) [Table, Sl. No. 3(i)] of the Income-tax Act, 2025, which replaced the old Section 194-IA of the Income-tax Act, 1961. The trigger is unchanged: TDS applies whenever the consideration is ₹50,00,000 or more. Payments or credits made before 1 April 2026 continue to be governed by the old Section 194-IA, so which law applies depends on the payment date, not the deal date.
The buyer is responsible for deducting the tax, not the seller, and not a chartered accountant filing on anyone's behalf. TDS must be deducted at the time of paying or crediting the consideration — including any advance or instalment — whichever happens earlier. Unlike most other TDS provisions, the buyer doesn't need a TAN; the entire transaction is reported using PAN alone. The reporting form itself changed on 1 April 2026: what used to be Form 26QB is now Form 141 (specifically, Schedule B of Form 141, which also covers rent, contractor/professional payments and virtual digital asset transfers in its other schedules).
The Income-tax Act, 2025 also spells out "consideration" more explicitly than the old law did — it now expressly includes club membership fees, car parking fees, electricity and water facility charges, maintenance fees, advance fees and other charges incidental to the transfer, not just the headline sale price. Buyers structuring a deal with a lower "sale price" and separate "facility charges" should add these back before checking against the ₹50 lakh threshold.
1% TDS — on the higher of sale price or stamp duty value
The rate is still a flat 1% of the total sale consideration, unchanged by the new law. As before, if the stamp duty value (the circle rate or guidance value used to compute stamp duty) is higher than the actual sale price, TDS must be deducted on whichever of the two is higher — so a property sold at ₹48 lakh with a stamp duty value of ₹55 lakh attracts TDS on ₹55 lakh, not ₹48 lakh. The same higher-of-the-two figure is also used to check whether the ₹50 lakh threshold is even crossed.
One genuine change: under the old Form 26QB regime, every buyer-seller pair needed its own separate filing, however many joint buyers or sellers were on the deed. Under the Income-tax Act, 2025, a single Form 141 can cover multiple buyers or multiple sellers in one go, as long as everyone on that side of the deal shares the same category (all individuals, or all companies) — cutting down the number of filings for a jointly owned or jointly purchased property. The ₹50 lakh threshold still applies to the total consideration for the property, not each buyer's individual share.
If the seller doesn't provide a PAN, the rate still jumps sharply to 20% — now under Section 397(2) of the Income-tax Act, 2025 (the successor to the old Section 206AA).
How to file Form 141 and pay the TDS
Form 141 is filed on the Income Tax Department's e-filing portal (incometax.gov.in): log in with your PAN, then go to e-File > e-Pay Tax, select "Income-tax Act, 2025" as the applicable law, choose New Payment, and pick Form 141. This replaced the earlier "e-Pay Tax / TDS on Sale of Property" flow that generated Form 26QB (which itself had replaced a separate TIN-NSDL site years before). You'll need both the buyer's and seller's PAN, the property address, the total consideration, and the date and amount of the payment being reported — filing is online-only, and a single filing can't mix, say, a property-transfer entry with a rent entry; each transaction type uses its own Form 141 submission.
Once submitted, you can pay immediately via net banking, or generate a challan to pay at an authorized bank branch — most buyers now pay online in the same session.
The deadline is unchanged: 30 days from the end of the month in which the TDS was deducted, not 30 days from the payment date itself. A payment made on 5 July, for instance, must have Form 141 filed and the tax deposited by 30 August.
Form 132 (still called "Form 16B"): the certificate the seller actually needs
After Form 141 is filed and the tax paid, the buyer must register as a taxpayer on the TDS TRACES portal and download the TDS certificate — the old Form 16B is now officially Form 132 under the Income-tax Act, 2025, though most people, and much of the tax software, still refer to it as "Form 16B" out of habit. Whatever it's called, the buyer must hand it to the seller — this step is easy to forget, but it's not optional.
The certificate must still be issued to the seller within 15 days of the due date for filing Form 141. The seller needs it to claim credit for the TDS when filing their own income tax return, and to confirm the deduction shows up correctly in their Form 26AS and AIS.
What happens if you miss a deadline
Late deduction still attracts interest at 1% per month (or part of a month) from the date TDS was deductible to the date it was actually deducted, and late payment, once deducted, still attracts a steeper 1.5% per month (or part) from the date of deduction to the date of actual payment — these rates are unchanged, now set out under Section 398(3)(a) of the Income-tax Act, 2025 (previously Section 201(1A)).
Filing Form 141 late still carries a fee of ₹200 per day until filed, capped at the TDS amount itself — now under Section 427 (previously Section 234E). In more serious or prolonged cases of non-filing, the assessing officer can additionally levy a penalty of ₹10,000 to ₹1,00,000, now under Section 461 (previously Section 271H).
Because these obligations sit entirely with the buyer, forgetting to file doesn't just cost interest and penalties — it also blocks the seller from claiming their rightful TDS credit until it's sorted out, which can strain what should otherwise be a closed transaction.
Corrections still go through TRACES, not the e-filing portal
If you spot an error after filing — a wrong PAN, an incorrect consideration amount — the fix doesn't happen on the e-filing portal where you filed Form 141. Corrections to a filed Form 141 are made only through the TDS TRACES portal, the same system used for the old Form 26QB corrections, so keep your TRACES login handy even after the payment itself has moved to the newer portal.
Do I still file Form 26QB, or has it actually been replaced?
It has been replaced. From 1 April 2026, Form 26QB no longer applies to new property transactions — TDS on the sale of immovable property is now reported through Form 141 (Schedule B) under Section 393(1) of the Income-tax Act, 2025. Form 26QB remains relevant only for consideration that was paid or credited before that date, which falls under the old Section 194-IA of the Income-tax Act, 1961.
Does TDS under Section 393(1) apply to agricultural land?
No. Agricultural land, as defined under the Income Tax Act, is specifically excluded — no TDS obligation arises regardless of the sale value, the same exclusion that existed under the old Section 194-IA.
What if the property costs less than ₹50 lakh?
No TDS obligation arises if both the actual sale consideration and the stamp duty value are below ₹50,00,000. Cross both numbers against the threshold, since either one alone crossing ₹50 lakh triggers the requirement — and remember the Income-tax Act, 2025 now explicitly folds charges like club membership, parking and maintenance fees into "consideration" when checking this.
Is the same 1% rate used if the seller is an NRI?
No. Form 141 can only be used where the seller is a resident — it explicitly excludes non-resident deductees. When the seller is a non-resident, TDS on the sale of property is governed by Section 393(2) [Table, Sl. No. 17] of the Income-tax Act, 2025 (the successor to the old Section 195), at a materially higher rate that depends on the nature of the capital gain, and the buyer needs a TAN in that case. Many buyers and NRI sellers apply for a lower or nil-deduction certificate from the tax department to bring the rate down, which is a separate and more involved process than a straightforward Form 141 filing.
Can the seller just pay this TDS instead of the buyer?
No — the deduction obligation is placed on the buyer by law and can't be reassigned by mutual agreement between the parties. If the buyer doesn't deduct and deposit it, the seller's Form 26AS won't show the credit, and any interest or penalty for the delay falls on the buyer, not the seller.
Can the TDS be deposited before the property registration date?
Yes. TDS liability arises when the consideration is paid or credited to the seller, whichever is earlier — not on the registration date. If payment happens before registration, Form 141 and the TDS deposit are due within 30 days from the end of that month, independent of when the sale deed is registered. Many sub-registrar offices in fact require the Form 141 challan to be shown before they will register a high-value sale, so depositing TDS ahead of registration is standard practice.
