Buying property or paying high rent: What are the TDS obligations for individual taxpayers?

According to the official Income Tax Department booklet, “TDS under Section 194‑IA applies to payment of consideration on transfer of immovable property (other than agricultural land) exceeding ₹50 lakh.”

For rental payments, CBDT highlights that “TDS under Section 194‑IB applies to rent payments by individuals or HUFs not subject to tax audit, where monthly rent exceeds ₹50,000.”

TDS on purchase of immovable property (Section 194-IA)

The buyer (transferee) is responsible for deducting TDS when purchasing immovable property from a resident seller.

TDS applies if the consideration for the transfer (property value) is ₹50 lakh or more (excluding agricultural land).

The rate of TDS is 1% of the total sale consideration.

The buyer must file a Challan-cum-Statement in Form 26QB.

TDS must be deposited with the government within 30 days from the end of the month in which the deduction was made.

The buyer must issue Form 16B (TDS Certificate) to the seller.

TDS on rent payments (Section 194-IB)

The Tenant (Individual or HUF) must deduct TDS if they are not subject to a tax audit and pay high monthly rent.

TDS applies if the monthly rent exceeds ₹50,000.

The rate of TDS is 5% of the rent amount.

The tenant must file a Challan-cum-Statement in Form 26QC. What is the deadline for deposit?

The due date for depositing TDS is the 7th day of the next month following the month of deduction.

The tenant must issue Form 16C (TDS Certificate) to the landlord

Consequences of non-compliance

In both cases, failure to deduct or deposit the required TDS on time attracts interest and penalties, and the deductor (Buyer or Tenant) is treated as an assessee in default. Both parties must have a valid and linked PAN; otherwise, the TDS rate may increase to 20% (as per Section 206AA).