I bought property and missed TDS / Form 26QB: what to do now

You bought a flat, a plot or a shop. The registration is done and the seller has the money. Months later someone asks, "Did you deduct TDS and file Form 26QB?" You did not. You may not even have known the buyer had to.

This is a common miss. The law puts the duty on the buyer, not the seller. This article explains who must deduct, how much, by when, what happens if you missed it, and what a sensible late fix looks like. It does not give you a figure for your own case. Your facts decide that.

Step 1: Did the rule apply to you at all?

Section 194-IA of the Income-tax Act, 1961 applies when you, as the buyer (the law says "transferee"), pay a resident seller money for an immovable property. It does not apply to agricultural land (as defined in the section). Immovable property here means land (other than agricultural land) or a building or part of a building (Explanation (b), s.194-IA, Income-tax Act 1961).

Check four things.

• Is the seller a resident? Section 194-IA covers payments to a resident transferor. If the seller is a non-resident, a different part of the Act applies. Do not assume the 1% rule. Get a CA to look at it.
• Is it agricultural land? If it is agricultural land as defined in the section, s.194-IA does not apply.
• Is the price below the threshold? No deduction is needed where the consideration and the stamp duty value are both less than fifty lakh rupees (s.194-IA(2), Income-tax Act 1961). If either one is fifty lakh or more, the rule applies.
• Did the "consideration" include extras? The consideration includes club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee and similar charges that are incidental to the transfer (Explanation (aa), s.194-IA, Income-tax Act 1961). Builders often show these separately. They still count towards the threshold and the amount.

Stamp duty value has the meaning given in clause (f) of the Explanation to clause (vii) of sub-section (2) of section 56 (Explanation (c), s.194-IA, Income-tax Act 1961).

If you have more than one buyer or more than one seller, the amounts paid between all of them are added up to test the threshold (proviso to s.194-IA(2), Income-tax Act 1961).

Step 2: How much should have been deducted

The buyer must deduct one per cent of the sum paid, or of the stamp duty value of the property, whichever is higher (s.194-IA(1), Income-tax Act 1961).

So if the stamp duty value is higher than what you paid, the one per cent is worked on the stamp duty value.

The section also says when. You deduct at the time you credit the sum to the seller's account, or at the time you pay it by cash, cheque, draft or any other mode, whichever is earlier (s.194-IA(1)). The wording speaks of "such sum". If you paid in instalments, read the section with a CA to see how it applies to each payment.

Good news on admin. A buyer under s.194-IA does not need a TAN, because s.203A does not apply to a person deducting under this section (s.194-IA(3), Income-tax Act 1961).

Which Act applies to your purchase?

Two Acts are in play.

• For a purchase made before 1 April 2026, the Income-tax Act, 1961 applies, as amended by the Finance Act 2026. The default, interest and fee rules for those purchases sit in the 1961 Act (sections 201, 234E and 271C), and you should have a CA confirm them for your dates.
• The Income-tax Act, 2025 applies from tax year 2026-27, that is from 1 April 2026. Section 194-IA of the 1961 Act corresponds to section 393 (tax to be deducted at source), section 397 (compliance and reporting) and section 402 (interpretation) of the 2025 Act, per the official 1961-to-2025 section mapping. The 2025 Act figures given further down are tax year 2026-27 figures. They are not the rule for an earlier purchase.

Under the 2025 Act, the property row is serial number 3(i) of the table in s.393(1). It carries the same one per cent of the consideration or the stamp duty value, whichever is higher, and the same fifty lakh rupees threshold (s.393(1), Table Sl. No. 3(i), Income-tax Act 2025). The same timing applies: the earlier of credit or payment (s.393(1)(c), Income-tax Act 2025).

If your purchase straddles 1 April 2026, for example a booking in 2025 and a final payment in 2026, ask which payments fall under which Act before you do anything.

Step 3: The deposit clock and Form 26QB

Deduction is not the end. The buyer must deposit the tax and file a challan-cum-statement. For s.194-IA that is Form 26QB (rule 30(2A), Income-tax Rules, 1962).

Rule 30(2A) says the tax is to be paid within thirty days from the end of the month in which the deduction is made, with the challan-cum-statement in Form 26QB.

For tax year 2026-27 onwards, the official form mapping pairs Form 26QB with Form 141, the challan-cum-statement for deductions under s.393(1) Table serial numbers 2(i), 3(i), 6(ii) and 8(vi), Income-tax Act 2025. The due date under the Income-tax Rules, 2026 is not stated here. Confirm it with a CA before you file for a 2026-27 payment.

Step 4: What happens when you miss it

Several things can follow. Read this section by purchase date: the 1961 Act governs a purchase before 1 April 2026, and the 2025 Act figures below are for tax year 2026-27 onwards.

You can be treated as "in default"

Under the 1961 Act, section 201 deals with the consequences of failure to deduct or pay. Its counterpart in the 2025 Act is section 398. For tax year 2026-27 onwards, a person who is required to deduct tax and does not deduct it, or does not pay it, is deemed to be an assessee in default in respect of that tax, in addition to any other consequences under the Act (s.398(1), Income-tax Act 2025). If your purchase was before 1 April 2026, ask your CA to read s.201 of the 1961 Act, as amended, before you rely on the next points. They are written from the 2025 Act.

There is a safe route if the seller has already paid the tax

Under the 2025 Act, a buyer who fails to deduct is not deemed to be in default if the payee has furnished a return of income under section 263, has taken the amount into account in computing income in that return, and has paid the tax due on the income declared. The buyer must also furnish an accountant's certificate in the prescribed form (s.398(2), Income-tax Act 2025).

In plain words: for tax year 2026-27 onwards, if the seller reported the sale in their own return and paid tax on it, the department's claim against you for the tax itself can fall away. Interest can still run up to the date of that return (s.398(3)(c), below). You still need the seller's cooperation and a certificate from an accountant. Ask the seller for their return acknowledgement and computation. Do not ask for their private papers beyond what the certificate needs.

Interest

For tax year 2026-27 onwards, under the 2025 Act the buyer who fails to deduct is liable to simple interest of one per cent for every month or part of a month. It runs on the tax amount from the date the tax was deductible to the date it is deducted. If the tax was deducted but not paid, the rate is one and a half per cent per month, from the date of deduction to the date of actual payment (s.398(3)(a), Income-tax Act 2025). The interest is to be paid before the statement is furnished (s.398(3)(b)).

Where the buyer is not treated as in default because the seller paid the tax, the one per cent interest runs only until the date the seller furnished the return (s.398(3)(c), Income-tax Act 2025).

These are tax year 2026-27 onwards figures under the 2025 Act. They are not the rule for a purchase before 1 April 2026. That purchase falls under section 201(1A) of the 1961 Act, so ask a CA to confirm the rate and the period for your dates rather than carrying the 2025 figures across.

A fee for a late statement

Section 427 of the 2025 Act, as substituted by the Finance Act 2026, provides a fee of two hundred rupees for every day a statement under s.397(3)(b) is late. The fee cannot be more than the tax that should have been deducted, and it must be paid before the statement is delivered (s.427(1) and (2), Income-tax Act 2025, as substituted by s.96, Finance Act 2026). Whether this fee applies to a late Form 26QB or Form 141 is a point to confirm with a CA. For the 1961 Act, the matching provision is section 234E, which also needs a CA's check for a purchase before 1 April 2026.

There is also a penalty section for failure to deduct tax at source (s.271C of the 1961 Act, which maps to s.448 of the 2025 Act). This article gives no figure for it. Ask your CA to check it.

How long can the department go back?

An order deeming a person in default for not deducting cannot be made after six years from the end of the tax year in which the tax was deductible, or after two years from the end of the tax year in which a correction statement is delivered, whichever is later (s.398(5), Income-tax Act 2025). This limit is for tax year 2026-27 onwards. For earlier years, check s.201 of the 1961 Act with your CA.

Step 5: A sensible late fix, in order

• Pin down the facts. Date of each payment, amount, mode, who paid, stamp duty value in the registered sale deed, and whether any part was an extra charge such as parking or club fees.
• Decide if s.194-IA really applied. Use Step 1. Many buyers find the property was agricultural land, or both values were under fifty lakh rupees.
• Get the seller's PAN and residential status. Under the 2025 Act, if the seller does not furnish a valid PAN, tax is deducted at the highest of the rate in the relevant provision, the rate in force, or twenty per cent in a case like this (s.397(2)(b), Income-tax Act 2025). For a purchase before 1 April 2026, ask your CA what the 1961 Act says. Check whether this affects you.
• Work out the deduction and the interest period with a CA, using the right Act for each payment date.
• Deposit the tax and file the challan-cum-statement. Form 26QB for 1961-Act payments (rule 30(2A), Income-tax Rules, 1962). Form 141 for 2026-27 payments (mapping of the Income-tax Rules, 2026). Follow the tax portal's current steps.
• Pay the interest first. For tax year 2026-27 onwards, the 2025 Act requires interest to be paid before the statement is furnished (s.398(3)(b), Income-tax Act 2025). For an earlier purchase, confirm the position under the 1961 Act.
• Keep proof. The challan, the statement acknowledgement and the sale deed.
• If the seller already paid tax on the sale, ask your CA about the accountant's certificate route (s.398(2), Income-tax Act 2025).

What not to do

• Do not pay the seller less now to "adjust" the missed TDS unless your agreement says so and a CA has looked at it. The tax belongs to the department, and it is the buyer's duty.
• Do not file with a guessed amount. A wrong stamp duty value or consideration causes a second set of problems.
• Do not backdate documents. Date every challan and statement truthfully.

What to do now

• Next step: list every payment with date and amount, and find the stamp duty value in the sale deed. Then check Step 1 (s.194-IA, Income-tax Act 1961; s.393(1), Table Sl. No. 3(i), Income-tax Act 2025).
• Deadline: the tax was due within thirty days from the end of the month of deduction for 1961-Act payments (rule 30(2A), Income-tax Rules, 1962). If that has passed, interest runs on the missed tax. For tax year 2026-27 onwards it runs month by month until the tax is deducted and paid (s.398(3)(a), Income-tax Act 2025); for an earlier purchase, confirm s.201(1A) of the 1961 Act with a CA. Fix it sooner rather than later.
• Consequence of leaving it: being treated as an assessee in default for the tax, interest for each month or part of a month, and a possible fee for a late statement (s.398(1) and (3) and s.427, Income-tax Act 2025, for tax year 2026-27 onwards; s.201 and s.234E of the 1961 Act for earlier purchases, to be confirmed with a CA).

Have a CA review your facts before you act or file.

Frequently asked questions

The property cost less than fifty lakh rupees, but the stamp duty value was higher. What now?

No deduction applies only where the consideration and the stamp duty value are both less than fifty lakh rupees (s.194-IA(2), Income-tax Act 1961). If the stamp duty value is fifty lakh or more, the rule applies even where you paid less.

Do I need a TAN?

For s.194-IA, no. Section 203A does not apply to a person deducting under this section (s.194-IA(3), Income-tax Act 1961). The 2025 Act has a similar TAN exemption for this deduction (s.397(1)(c), Income-tax Act 2025; clause (c) was re-cast from 1 October 2026 by s.87, Finance Act 2026).

The builder is the seller and says his accountant handles it. Is the buyer still responsible?

The section names the buyer as the person who must deduct (s.194-IA(1), Income-tax Act 1961). Ask for proof that the deduction was made and the challan-cum-statement was filed for your purchase.

The seller is an NRI. Is this the same?

No. Section 194-IA covers payments to a resident transferor. A non-resident seller falls under a different part of the law. See a CA before you pay or fix anything.

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