TDS on property under the Income-tax Act 2025: Section 393 changes

Many buyers have heard that TDS on property has "changed" under the Income-tax Act 2025 and are worried they will now pay more. You will not. The substance of the deduction is carried over intact; what has moved is the numbering and the paperwork.

What has actually stayed the same?

Everything that decides how much you deduct. You still deduct 1 per cent of the consideration when you buy immovable property other than rural agricultural land from a resident seller, at the earlier of credit or payment. The base is still the higher of the actual sale consideration or the stamp duty value.

• No deduction where the consideration and the stamp duty value are both under Rs 50,00,000. Once that threshold is met, 1 per cent applies to the entire amount, not just the excess.
• Since 1 October 2024, where there are several buyers or sellers, the Rs 50 lakh test looks at the aggregate paid by all transferees to all transferors — splitting a purchase between co-buyers no longer helps.
• Payment in instalments means deduction from every instalment, not one deduction at the end.
• You still do not need a TAN; you deduct and deposit using your own PAN.

You can work out your own figure on the TDS on property purchase calculator.

So what has Section 393 changed?

The label and the forms. Section 194-IA of the 1961 Act becomes Section 393(1), Table Sl. No. 3(i). The 20 per cent consequence where the resident seller does not furnish a PAN continues, now through Section 397(2). If the seller is an NRI, Section 194-IA never applied and still does not — you deduct under the successor to Section 195, with no Rs 50 lakh threshold, and you do need a TAN.

The deduction, worked

What to verify afterwards: the seller should see the credit appear in their Form 26AS and AIS for that year. If it does not, the return mismatch surfaces at assessment, usually long after everyone has moved on. Check it once, in the same financial year.

Which forms do I file, and from when?

The cut-off is clean. For transactions up to 31 March 2026: Form 26QB within 30 days from the end of the month of deduction, and Form 16B to the seller within 15 days of that due date. From 1 April 2026, which is the current law: Form 141 (Schedule B for immovable property), a merged challan-cum-statement filed through your PAN login, on the same 30-day timeline, with the certificate now Form 132 within 15 days of the statement due date.

Deadlines here are unforgiving, and a redevelopment sale brings its own wrinkles — see our guide to TDS on property purchase and, for the seller's side, capital gains on redevelopment. Where instalments, co-owners or an NRI seller are involved, have a chartered accountant check your specific facts before you deduct.