Property prices in Greater Noida are on rise. This is one of most important financial decisions for any individual or family. In Greater Noida, where property prices frequently exceed ₹50 lakh, TDS on property purchase becomes a mandatory and critical income-tax compliance.

However, many buyers wrongly believe that tax compliance is the seller’s responsibility. In reality, under the Income-tax Act, the buyer must deduct and deposit TDS. Failing to comply may result in interest, penalties, and even delay in property registration.

1. What Is TDS on Property?

TDS (Tax Deducted at Source) on property means that the buyer deducts tax from the payment made to the seller and deposits it with the Income-tax Department.

In other words, the government collects tax at the time of transaction itself, instead of waiting for the seller to pay tax later.

2. Legal Provisions Applicable in 2026

At present, the following sections govern TDS on property:

• Section 194-IA – When the seller is a Resident Indian

• Section 195 – When the seller is a Non-Resident Indian (NRI)

Notably, these provisions apply uniformly across India, including Greater Noida, Uttar Pradesh.

3. Who Is Responsible for TDS on Property?

Importantly, the buyer (purchaser) is fully responsible for:

• Deducting TDS

• Depositing TDS with the government

• Filing Form 26QB

• Issuing Form 16B to the seller

This responsibility applies even if the buyer is:

• A salaried employee

• Not engaged in any business or profession

4. When Does TDS on Property Apply? (₹50 Lakh Rule)

TDS becomes mandatory if all the following conditions are satisfied:

• The sale consideration OR stamp duty value is ₹50,00,000 or more

• The property is immovable property (flat, house, plot, commercial unit)

• The property is not rural agricultural land

However, if both the sale price and stamp duty value are below ₹50 lakh, TDS does not apply.

5. What Is Included in “Total Consideration”?

For TDS purposes, total consideration includes more than just the basic sale price.

Therefore, the buyer must include:

• Basic sale price

• Car parking charges

• Club or society membership fees

• Electricity and water facility charges

• Maintenance charges paid to the builder

• Booking or advance amounts

If these charges are mandatory under the agreement, they form part of the value on which TDS is calculated.

6. Agricultural Land – Important Exception

TDS does not apply to the purchase of rural agricultural land.

However, keep in mind:

• Urban agricultural land does not qualify for exemption

• Buyers must verify land classification before assuming TDS exemption

7. TDS Rates on Property (2026)

7.1 When Seller Is a Resident Indian (Section 194-IA)

 TDS is calculated on the higher of sale price or stamp duty value.

7.2 When Seller Is an NRI (Section 195)

In this case, Section 194-IA does not apply.

TDS must be deducted under Section 195, based on capital gains:

NRI property transactions require professional handling due to high tax exposure. NRI can also apply for low TDS rate deduction. The application should be made to the Income-tax Department by filing Form 13 under Section 197 for obtaining a Lower or Nil TDS Certificate.

8. On Which Amount Is TDS Calculated?

The buyer must deduct TDS on the higher of:

• Sale consideration mentioned in the agreement or

• Stamp duty (circle) value adopted by the Sub-Registrar

This rule is strictly followed during registry in Greater Noida.

9. Greater Noida Authority (GNIDA)

9.1 Authority Charges

• Lease rent, transfer charges, or administrative fees paid directly to GNIDA are not subject to TDS

• TDS applies only on the amount paid to the seller

9.2 Registry Verification

• Sub-Registrar Offices in Greater Noida generally verify Form 26QB

• Without proof of TDS payment, property registration may be delayed or rejected

10. Step-by-Step TDS Compliance Process

Step 1: Deduct TDS

TDS must be deducted at the time of each payment, including:

• Booking amount

• Installments

• Final payment

Step 2: Deposit TDS – Form 26QB

• File Form 26QB online

• Deposit TDS within 30 days from the end of the month of deduction

Example:
Payment on 15 January → Form 26QB due by 2 March

You can visit income tax website to fill form Form 26QB

Step 3: Issue TDS Certificate – Form 16B

• Download Form 16B from TRACES

• Provide it to the seller as proof of TDS deduction

11. Penalties for Non-Compliance

Failure to comply may lead to:

11.1 Interest

• 1% per month for failure to deduct

• 1.5% per month for failure to deposit

11.2 Late Fee

• ₹200 per day under Section 234E

• Capped at the amount of TDS

11.3 Penalty

• Penalty of up to ₹1,00,000 may be levied by the Assessing Officer

12. How a Chartered Accountant Helps

A Chartered Accountant ensures:

• Correct applicability of law

• Accurate TDS calculation

• Timely filing of Form 26QB

• Error-free Form 16B issuance

• Protection from penalties and registry complications

Frequently Asked Questions (FAQs)

1. What is TDS on property in simple terms?
It means the buyer deducts tax from the payment made to the seller and deposits it with the government.

2. Who deducts TDS – buyer or seller?
The buyer deducts TDS.

3. When is TDS compulsory?
When sale price or stamp duty value is ₹50 lakh or more.

4. What is the TDS rate?

• 1% for resident sellers

• Higher rate for NRI sellers

• 20% if PAN is not provided

5. Do I deduct TDS on booking amount?
Yes. TDS applies to every payment.

6. On which value should I calculate TDS?
On the higher of sale price or stamp duty value.

7. Is TDS applicable on parking and club charges?
Yes, if they are mandatory under the agreement.

8. Is TDS applicable on agricultural land?
No, if it is rural agricultural land.

9. I am a salaried person. Do I still deduct TDS?
Yes. Salary status does not matter.

10. What happens if I miss TDS compliance?
You may face interest, late fees, penalties, and registry delays.

11. Is PAN mandatory?
Yes. Without PAN, TDS increases to 20%.

12. Is TDS different in Greater Noida?
No. However, Sub-Registrars usually verify Form 26QB before registry.

Conclusion