When you purchase immovable property worth ₹50 lakhs or more, you must deduct TDS at 1% under Section 393(1), Table Sl. No. 3(i) and deposit it using Form 141 within 30 days from the end of the month of deduction. No TAN required — only PAN of buyer and seller.
What is TDS on Property Purchase?
Under Section 393(1), Table Sl. No. 3(i) of the Income Tax Act, 2025, any buyer of immovable property (excluding agricultural land) is required to deduct Tax Deducted at Source (TDS) at the time of making payment to the seller, if the total consideration is ₹50 lakhs or more.
This provision was introduced to track high-value property transactions and bring both buyers and sellers into tax compliance. The deduction should occur at the time of payment or credit to the seller, whichever is earlier.
What is Form 141?
Form 141 is a challan-cum-statement used for depositing TDS deducted on purchase of immovable property. It serves a dual purpose — it is both the TDS payment challan and the TDS return statement for the transaction.
It is filed and paid online through the Income Tax e-filing portal (incometax.gov.in) under the e-Pay Tax option. After successful payment, a Form 132 (Earlier Form 16B) (TDS certificate) must be issued to the seller within 15 days.
Key Parameters
| Parameter | Details |
|---|---|
| Applicable Section | Section 393(1), Table Sl. No. 3(i), Income Tax Act 2025 |
| TDS Rate | 1% of total sale consideration |
| Threshold Limit | ₹50 lakhs or more |
| Property Type | All immovable property except agricultural land |
| Form to File | Form 141 |
| Due Date | Within 30 days from end of month of deduction |
| TAN Required | No — PAN of buyer and seller is sufficient |
| TDS Certificate | Form 132 (Earlier Form 16B) — to be issued to seller within 15 days |
Documents Required to File Form 141
- PAN of the buyer and seller
- Aadhaar Card of buyer and seller
- Sales Deed details including property address and transaction value
- Bank account details for online payment
- Payment proof if already made
Three Key Areas of Compliance
| Documents & Registration | Forms | Deduction & Return Filing |
|---|---|---|
| PAN Card | Form 141 | TDS deduction when payment is done |
| Aadhaar Card | Form 132 (Earlier Form 16B) | Depositing TDS and filing returns |
| Sales Deed | ||
| TRACES Registration |
Step-by-Step Process to File Form 141
Special Rules for Multiple Buyers or Sellers
In case of multiple buyers, each buyer is required to file a separate Form 141 for their respective share of the property transaction. TDS shall be deducted and deposited according to the buyer’s proportionate share of the total sale consideration.
In case of a single buyer and multiple sellers, a single Form 141 may be filed by providing details of all sellers along with their respective share in the sale consideration. TDS shall be deducted and deposited based on the respective seller shares.
Where payment for the property is made through instalments, a separate Form 141 is required to be filed for each instalment. TDS shall be deducted proportionately on each instalment at the time of payment or credit, whichever is earlier.
In case of a subsequent or last instalment, the previous acknowledgement number of the earlier filed Form 141 must be provided while filing the new Form 141.
When is Property NOT Treated as Agricultural Land?
A buyer is exempt from TDS if the property is genuine agricultural land. However, the following land will not be classified as agricultural and TDS will apply:
| Distance from Cantonment Board or Municipality | Population |
|---|---|
| Up to 2 kms | Minimum 10,000 but not exceeding 1,00,000 |
| Up to 6 kms | Minimum 1,00,000 but exceeding 10,00,000 |
| Up to 8 kms | Above 10,00,000 |
Penalty Charges for Non-Compliance
| Default | Penalty / Interest |
|---|---|
| TDS not deducted | Interest @ 1% per month u/s 201(1A) from date TDS was deductible |
| TDS deducted but not paid to government | Interest @ 1.5% per month u/s 201(1A) from date of deduction |
| Delay in filing Form 141 | ₹200 per day u/s 234E (max = TDS amount) |
| Penalty u/s 271H | ₹10,000 to ₹1,00,000 if return not filed within specified time |
| Form 132 (Earlier Form 16B) not issued to seller | Penalty u/s 272A |
Authorised Banks for TDS Payment
- State Bank of India, HDFC Bank, ICICI Bank, Axis Bank
- Bank of Baroda, Punjab National Bank, Canara Bank, UCO Bank
- Union Bank of India, Indian Bank, IDBI Bank, Bank of Maharashtra
- Indian Overseas Bank, Central Bank of India, Punjab and Sind Bank
- Bank of India, Jammu and Kashmir Bank, United Bank of India
How to Download Form 132 (Earlier Form 16B) from TRACES
Common Mistakes to Avoid
- Incorrect PAN entry — Always verify PAN of both buyer and seller before submitting to prevent future discrepancies
- Delayed filing — Filing Form 141 beyond the 30-day period attracts ₹200 per day penalty
- Multiple buyers or sellers — Separate Form 141 must be filed for each unique buyer-seller combination
- Forgetting Form 132 (Earlier Form 16B) — Many buyers forget to provide Form 132 (Earlier Form 16B) to the seller which causes issues in the seller's ITR
- NRI Seller — Different rules apply when the seller is an NRI — higher TDS rate applies under Section 195.
- Agricultural land exemption — Verify whether the land genuinely qualifies as agricultural before assuming exemption
- TDS at 1% applies on property purchase of ₹50 lakhs or more
- No TAN required — only PAN of buyer and seller
- File Form 141 within 30 days from end of month of payment
- Issue Form 132 (Earlier Form 16B) to seller within 15 days of filing
- Separate Form 141 required for each buyer-seller combination
- TDS deducted on each instalment in case of part payments
- Non-compliance attracts interest, late fees and penalties
Need Help Filing TDS on Property Purchase?
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