TDS – 1% rule for sale of property

Union Finance Minister presented the Budget of 2013-14 & have introduced the 1% TDS rule on sale of property.

It was enacted in June 2013 the authorities make mandate on sale of property which exceeding Rs.50 Lakhs in any part of India must pay a tax 1% has to be deducted on the total sale consideration before making the payment to the seller.

Property buyer must then deposit this 1% TDS to the Government. PAN of both the buyer and seller must be compulsorily specified while filling out Form 26QB to ensure that sellers don’t avoid taxes on the capital gains they make.

Procedure to deposit TDS on sale of property above Rs. 50 Lakhs.

  • Calculate 1% TDS on the total sale consideration. For a property getting sold for Rs. 80 lakhs, the seller would receive Rs.79,20,000 after tax.
  • Make the payment online on Form 26QB. A challan is generated. Note that this must be done within 7 days from the end of the month in which TDS is deducted.
  • The payment is reflected on the seller’s Form 26AS under the head Part F within 7 days.
  • The buyer is then required to furnish a TDS certificate called Form 16B to the seller.

To download the same from TRACES website –

  • For this, register on the TRACES website with your PAN and challan number.
  • Click on “Application for request of Form 16B” from the header.

Note – The rule of 1% TDS on sale of property does not apply on agriculture land.


We at Floorrise give a best fit projects in and around pune, so please if you have any information required, please feel free to get in touch with us.

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