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Income Tax · Capital gainsBuying property above ₹50 lakh: buyer's tax and compliance checklist
Buying a flat or plot worth ₹50 lakh or more brings tax duties for the buyer, not just the seller – TDS, PAN checks, cash limits and possible tax on a below-circle-rate deal. Here is a practical checklist for buyers in Delhi NCR under the new Income-tax Act.
A property purchase of ₹50 lakh or more makes the buyer responsible for several tax compliances. Getting them wrong leads to interest, fees and notices – often years later. Here is a step-by-step checklist, updated for the Income-tax Act, 2025 (in force from 1 April 2026).
Before signing
- Collect the seller's PAN and verify it on the e-filing portal ("Verify PAN"). If the seller's PAN is inoperative (not linked with Aadhaar), TDS is at 20%.
- Check residential status of the seller. A non-resident seller means TDS under Section 195 (Section 393(2) of the 2025 Act) on the capital gain at much higher rates, not 1%.
- Check the circle rate / stamp duty value. If you pay less than SDV by more than 10% and the difference exceeds ₹50,000, the difference is taxable in your hands under Section 56(2)(x).
- Pay advances by bank transfer and mention them in the agreement – it protects the agreement-date valuation and avoids cash rules.
TDS at 1%
| Point | Rule |
|---|---|
| Threshold | Consideration or SDV ₹50 lakh or more (total, not per buyer) |
| Rate | 1% (20% if seller's PAN is not available/inoperative) |
| Base | Higher of consideration and SDV; includes car parking, club membership, maintenance deposit and similar charges paid to the seller as part of the transfer |
| When | At the time of payment / credit of each instalment |
| Form | Form 141 for payments from 1 April 2026 (Form 26QB before) – one per buyer–seller pair |
| Due date | Within 30 days from the end of the month of deduction |
| Certificate | Form 132 (Form 16B earlier) from TRACES, to the seller within 15 days of the due date |
| Late fee / interest | ₹200 per day; interest 1% / 1.5% per month |
Cash restrictions
- Section 269SS: the seller cannot accept ₹20,000 or more in cash as advance or consideration for immovable property.
- Section 269ST: nobody may receive ₹2 lakh or more in cash in a single transaction, day or event.
- Penalty equal to the amount accepted can apply to the recipient. Cash payments also make it hard to prove your cost when you sell later.
Stamp duty and registration in Delhi
Delhi stamp duty rates differ for men, women and joint owners, and there is a registration fee on top. Stamp duty and registration paid are part of your cost of acquisition for future capital gains, and qualify for the 80C / Section 123 deduction in the year paid (old regime) for a residential house.
Worked example
Example: Ms Kapoor buys a builder floor in Rohini Sector 16 from two co-owners (50:50) for ₹1,20,00,000; SDV is ₹1,26,00,000. She pays ₹12,00,000 on 5 May 2026 and the balance ₹1,08,00,000 on 20 July 2026.
| Payment | Amount | TDS base (SDV share) | TDS per seller | Form 141 due |
|---|---|---|---|---|
| 5 May 2026 | ₹12,00,000 | Proportionate to SDV: ₹12,60,000 | ₹6,300 each | 30 June 2026 |
| 20 July 2026 | ₹1,08,00,000 | ₹1,13,40,000 | ₹56,700 each | 30 August 2026 |
Total TDS ₹1,26,000 (1% of SDV), split equally between the two sellers through separate Form 141 filings. Because the price is less than the SDV by 5% (within 10%), Section 56(2)(x) does not apply to Ms Kapoor.
Home loan and joint purchase
- Each co-buyer deducts TDS on their share of payment.
- If financed by a bank, TDS is still the buyer's responsibility – the bank disburses net of TDS on request.
- Interest and principal benefits are available to each co-owner who is a co-borrower (old regime) – see joint home loan tax benefits.
Reporting by others
- The sub-registrar reports purchases of ₹30 lakh or more in the SFT (statement of financial transactions); it appears in your AIS.
- Your bank reports large payments.
- The department may ask you to explain the source of funds; keep bank trails, loan sanction letters and gift deeds ready.
After registration
- Download Form 132 and give it to the seller.
- Keep all receipts, agreement, sale deed and payment proofs permanently – they establish your cost on a future sale.
- Get the property mutated and update property tax records.
Common mistakes
- Computing TDS on the agreement value when SDV is higher.
- Using Form 26QB for payments after 1 April 2026.
- Deducting 1% from an NRI seller.
- Paying the "black" part in cash – illegal, unrecoverable in disputes, and it inflates your future capital gain.
Key takeaway
As a buyer, your job is: verify PAN and residency, deduct 1% on the higher of price and SDV through Form 141, issue Form 132, pay only through banks and keep records. Our TDS team files Form 141 and handles NRI-seller TDS and lower-deduction certificates for property buyers.
Official references
Official sources to verify the current text, notifications and circulars:
Frequently asked questions
Does the buyer need a TAN to deduct TDS on property?
No, for a resident seller. The buyer deducts 1% and deposits it through Form 141 (earlier Form 26QB) using their PAN. For a non-resident seller, TDS under Section 195 traditionally required a TAN; Budget 2026 proposed PAN-based deposit for resident individual buyers from 1 October 2026.
Is TDS deducted on the stamp duty value or the agreement price?
On the higher of the two. The ₹50 lakh threshold is also tested on the higher value.
Can I pay part of the price in cash?
Receipts of ₹20,000 or more in cash in relation to transfer of immovable property are prohibited for the seller under Section 269SS, and any cash receipt of ₹2 lakh or more is barred by Section 269ST. Penalties equal to the cash amount can apply. Pay through banking channels.
Is TDS deducted on each instalment for an under-construction flat?
Yes. Once the total consideration is ₹50 lakh or more, 1% is deducted from each instalment at the time of payment.
Is TDS required when buying agricultural land?
No. TDS at 1% does not apply to agricultural land (rural agricultural land as defined).
Who pays the late fee if Form 141 is filed late?
The buyer (deductor). Fee of ₹200 per day applies, up to the TDS amount, plus interest for late deduction or payment.
Do I need to report the purchase in my ITR?
In the old regime, claim stamp duty under 80C/Section 123 if eligible; individuals with income above ₹1 crore report assets in Schedule AL. Keep the source-of-funds trail in case of queries.
This article is general information on the law as on 10 November 2026, written for educational purposes. It is not professional advice for your case. Section numbers under the Income-tax Act, 2025 should be confirmed with the official section mapping on the Income Tax Department website before use in filings.
Have a tax, GST or business question?
Call, WhatsApp or email CA Dilbagh Singh and team, from Delhi, anywhere in India or abroad.