Buying property: the 1% the buyer deducts, and which form to use

Section 393(1), table serial 3(i), as the tax year 2026-27 note sets it out: any person who is the transferee, paying a resident transferor for immovable property other than agricultural land, deducts the tax. The note excludes the person in table serial 3(iii). That serial, on the rates table, is compensation on acquisition of certain immovable property, at 10%.

Immovable property, in the same note, means any land other than agricultural land, or any building or part of a building.

Deduct at the earlier of two times. One is the credit of the sum to the transferor's account. The other is the payment, in cash, by cheque, by draft, or in any other way.

There is no requirement to apply for a TAN. The Form 141 FAQ says you file with the deductor's PAN.

Table serial 3(ii) on the rates page is a different payment: monetary consideration under a joint development agreement, at 10%. This page does not walk through that row.

The tax year 2026-27 note says the deduction is 1% of such sum. "Such sum" is the consideration credited or paid. Paragraph 9 repeats the rate as 1%. The rates table prints 1 against the same serial.

The note does not use one sentence for when the 1% starts. Read the lines as printed.

Paragraph 1 is the line that names both figures. If each of them is under Rs. 50 lakh, that paragraph says you do not deduct. Paragraph 6 is the line that starts the deduction once either figure is Rs. 50 lakhs or more. Paragraph 3 mentions only the consideration. The FAQ uses one shorter line. They are all on department pages. This page does not pick a fifth version.

The 1961 note is labelled as the Income-tax Act, 1961, as amended by the Finance Act, 2026. It deducts 1% of the sales consideration or the stamp duty value, whichever is higher, if either amount is Rs. 50 lakhs or more. It says that 1% is not increased by surcharge or health and education cess.

The 2025 property note does not mention surcharge or cess. The rates-table header does: the rate of TDS shall be increased by applicable surcharge and health and education cess. Use the 2025 property note for the 1% of such sum. Use the rates-table header for the surcharge sentence. Do not copy the 1961 "whichever is higher" base onto the 2025 note. That base is printed only on the 1961 note.

The tax year 2026-27 note says agricultural land means agricultural land in India that is not in an area referred to in section 2(22)(iii). It then says a land is not treated as agricultural land in two cases.

If the land fails that test, it is immovable property for this deduction, the same as a building. Selling it can still be a capital-gains question. The rollover into bonds is on the section 54EC page, which is about the seller's tax, not the buyer's TDS.

Where there is more than one transferor or transferee, the note says the consideration is the aggregate of the amounts paid or payable by all the transferees to the transferor or to all the transferors.

That aggregate is what you put against the ₹50 lakh lines in the previous section. A half share under Rs. 50 lakh does not, on its own, switch the deduction off, if the aggregate crosses the line the note uses.

Filing is a second rule, from the Form 141 FAQ, question 15. Each deductor files a form for that deductor's proportionate share. One form can name more than one deductee. One deductor can put more than one transaction of the same kind on one form if the month of deduction is the same. A different month is a different form. Question 13: only one schedule on a form.

Section 3 says a tax year is the twelve months that start on 1 April. The Form 141 FAQ, question 25, says Form 141 applies to transactions pertaining to tax year 2026-27 onwards. The time of deduction is the earlier of credit and payment. That date decides the month, and it decides whether the credit or payment falls in tax year 2026-27.

Question 2 of the FAQ says Form 141 replaces Form 26QB, Form 26QC, Form 26QD, and Form 26QE. Schedule B is the purchase of immovable property, which was Form 26QB. Schedule A is rent (old 26QC). Schedule C is a payment to a resident contractor or professional (old 26QD). Schedule D is a virtual digital asset (old 26QE). You fill the schedule that matches the payment.

A sum credited or paid on or after 1 April 2026 is in tax year 2026-27, so question 25 points at Form 141. A sum credited or paid before that date is not in that tax year. The steps page has not been rewritten, and it still names Form 26QB. The 1961 note still names Form 26QB. For a tax year 2026-27 deduction from a resident seller, the 2025 note and the FAQ both name Form 141, Schedule B.

The TDS guide still has a section headed 194-IA. That section is the old number. The figures for tax year 2026-27 are the ones in the table above.

The tax year 2026-27 note says the tax goes to the Central Government within thirty days from the end of the month of deduction, with a challan-cum-statement in Form 141. You remit it electronically to the Reserve Bank of India, the State Bank of India, or any authorised bank. The same note says you also furnish Form 141 electronically in those thirty days.

Form 132 goes to the payee within fifteen days from the due date for Form 141 under Rule 219, after you generate it from the web portal. The FAQ says you download Form 132 from TRACES and give it to the deductee. On a successful payment the FAQ says a challan identification number is generated against the acknowledgement.

A correction statement, the FAQ says, may be filed within two years from the end of the tax year in which the statement is required to be delivered. An authorised representative can file the original statement on the e-filing portal.

Question 21 says a late fee under section 427 applies if the form is late. Question 22 says interest under section 398(3)(a) applies for late deduction or late payment. Neither answer prints a rupee fee or a percent. This page does not add one.

If the seller does not give a PAN, the property note quotes section 397(2). The deductor uses the higher of: the rate prescribed in the Act, the rate in force, or 20%. A PAN that is invalid, or that is not the deductee's, is treated as no PAN. The higher-rate FAQ is the longer version of that test, including the two rows where the third figure is 5% rather than 20%. Those two rows are not serial 3(i).

Notification No. 121/2026 is the Income-tax (Fifth Amendment) Rules, 2026. It comes into force on 1 October 2026. It adds section 393(2), table serial 17, to Form 141, for a resident individual or a Hindu undivided family who has to deduct tax on consideration for the transfer of immovable property.

The new checkbox on the form reads: transfer of any immovable property by a non-resident to a resident individual or Hindu undivided family. The new schedule is Schedule E. It asks for the address, the type of property (land other than agricultural land, a building or part of a building, or both), every buyer's share of the consideration (the shares total 100%), and every seller's details. Those details include the address in the country or territory outside India, a tax residency certificate number, and a tax identification number. Seller shares also total 100%.

The notification does not print the percent. Schedule E has a field for the rate at which tax is deducted, and it points that field at a note. There is no number in the notification to copy into that field. Country treaty percents are on the tax treaty page. That page does not print a property-purchase percent either.

Schedule B remains the resident-seller schedule in the Form 141 FAQ. Schedule E is the 1 October 2026 addition, and only for a resident individual or an HUF as the buyer.