Short answer: if the flat costs ₹50 lakh or more, you, the buyer, keep back 1% of every payment to the builder or seller and deposit it with the government yourself, using Form 141 on the income tax portal, within 30 days from the end of the month you pay. Form 141 replaced Form 26QB for payments from 1 April 2026.
Does it apply to you?
- Price of ₹50 lakh or more: the test is on the whole price of the flat, not on each instalment. A ₹60 lakh flat paid in 10 instalments of ₹6 lakh still needs TDS on every instalment.
- What counts in the price: the agreement value plus charges paid to the seller for the flat, such as parking, club membership and preferential location charges. If the stamp duty value is higher than the price, TDS is on the stamp duty value.
- GST: TDS is usually worked out on the amount before GST when the builder shows GST separately. Practice varies, so check with your builder or CA if the invoice is unclear.
- Seller without a PAN: TDS is 20%, not 1%.
- Seller is an NRI: the 1% rule does not apply at all; the rates are much higher and you need a TAN. See the TDS on property calculator for NRI sellers.
A worked example: ₹80 lakh flat, construction-linked plan
The builder raises a demand for 10% on booking, plus 5% GST. You pay on 10 November 2026.
| Item | Amount |
|---|---|
| Instalment (10% of ₹80 lakh) | ₹8,00,000 |
| GST at 5% | ₹40,000 |
| TDS you keep back (1% of ₹8,00,000) | −₹8,000 |
| You pay the builder | ₹8,32,000 |
| You deposit with Form 141 | ₹8,000 |
| Form 141 due by | 30 Dec 2026 |
You repeat this for every demand. Over the whole flat that is ₹80,000 of TDS across all the instalments. The builder payment plan tracker lays out every instalment like this, with the Form 141 date for each one you mark as paid.
When your bank pays the builder
When the home loan is disbursed straight to the builder, the bank usually sends the full instalment. You still owe the 1% TDS. Deposit it from your own money, send the builder the Form 141 receipt, and ask them to credit that amount against your next demand. Keep the receipts: the TDS is your responsibility as the buyer, not the bank’s.
Filing Form 141, step by step
- Keep ready: your PAN, the builder’s PAN, the flat’s address, the agreement value, and the date and amount of this payment.
- Log in to the income tax portal (incometax.gov.in) with your PAN and choose the e-Pay Tax option for TDS on purchase of property (Form 141).
- Fill in the buyer, seller and property details, the amount paid and the TDS, and pay through net banking or your bank’s payment option. No TAN is needed.
- Save the challan receipt. A few days later, download the TDS certificate in Form 132 (earlier Form 16B) from TRACES and give it to the builder.
Menu names on the portal change from time to time; if a label differs, look for Form 141 or “TDS on property”.
If you’re late
- Interest of 1% a month if you don’t deduct the TDS when you pay, and 1.5% a month if you deduct it but deposit late.
- A late fee of ₹200 a day for filing Form 141 late, up to the amount of the TDS.
- Part of a month counts as a full month for interest, so a few days late can cost a full month.
Joint buyers
The ₹50 lakh test is on the whole flat. If you and your spouse buy a ₹70 lakh flat 50:50, each of you deducts 0.5% of each payment (half the TDS) and files your own Form 141 for your share.
Questions people ask
Is TDS needed on an under-construction flat below ₹50 lakh?
No. If the total price is under ₹50 lakh, no TDS is needed on any instalment.
What is the due date for Form 141?
30 days from the end of the month in which you pay. A payment on 10 November is due by 30 December.
Is Form 26QB still used?
Only for payments made before 1 April 2026. Payments from 1 April 2026 use Form 141.
Who gives the TDS certificate to the builder?
You do. Download Form 132 (earlier Form 16B) from TRACES after you pay, and send it to the builder so they can claim the credit.