TDS on Property Sale
Calculate TDS on the sale of property in India: 1% under Section 194-IA for resident sellers, and the higher Section 195 rate when the seller is an NRI.
💼 Are you a real estate agent or broker? Send this calculator to your buyers on your own branded listing page — every enquiry comes straight to your WhatsApp. Create free agent page →The buyer, not the seller, is responsible for deducting TDS on a property purchase and depositing it with the government. Get it wrong and the penalty falls on the buyer.
For a resident seller the rate is 1% under Section 194-IA on sale consideration of ₹50 lakh or more. When the seller is an NRI, Section 195 applies instead — TDS is deducted on the capital gain at 20% plus surcharge and cess, with no ₹50 lakh threshold at all. Buyers routinely miss this and end up personally liable.
Resident seller — Section 194-IA
If the sale consideration is ₹50 lakh or more, the buyer deducts 1% and deposits it using Form 26QB within 30 days of the end of the month of payment. No TAN is needed — the buyer's PAN is enough. Below ₹50 lakh there is no TDS. Where there are joint buyers or sellers, each pair files a separate 26QB.
NRI seller — Section 195
This is the trap. Section 195 has no threshold — TDS applies on any value. The buyer must hold a TAN, deduct at 20% plus applicable surcharge and 4% cess on long-term gains (or slab rates on short-term), and file Form 27Q. Deducted on the whole sale value, that is often 20.8% to 23.92% of the price.
The NRI seller can apply to the assessing officer under Section 197 for a lower or nil deduction certificate, so TDS applies only to the actual gain. Without it, the buyer must deduct on the gross amount and the seller waits for a refund after filing a return.
A worked example
An ₹80 lakh flat from a resident seller: TDS is ₹80,000, the seller receives ₹79,20,000, and the buyer files Form 26QB. The same flat from an NRI without a 197 certificate: TDS at 20% + 10% surcharge + 4% cess = 22.88% of ₹80 lakh = ₹18,30,400 withheld.
Failing to deduct makes the buyer liable for the tax plus interest and a penalty. If you are buying from anyone with a foreign address, an OCI card or an NRE account, confirm residential status in writing before paying anything.
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Create your free property pageFrequently asked questions
Who deducts TDS on a property sale — buyer or seller?
The buyer. The buyer deducts, deposits with the government and issues the TDS certificate. Liability for any failure rests with the buyer, not the seller.
Is TDS applicable below ₹50 lakh?
Not under Section 194-IA for a resident seller. But if the seller is an NRI, Section 195 applies from the first rupee — there is no threshold.
Is TDS calculated on circle rate or agreement value?
On the higher of the two. Since 2019, Section 194-IA refers to consideration including the stamp duty value, so a below-circle-rate deal still attracts TDS on the stamp duty value.
How does the NRI seller reduce this?
By applying under Section 197 for a lower-deduction certificate before the sale, so TDS is computed on the actual capital gain rather than the whole price. It takes several weeks, so start early.
What form does the buyer file?
Form 26QB for a resident seller, within 30 days of the end of the month of payment. For an NRI seller, the buyer needs a TAN and files Form 27Q quarterly.