TDS on Flat Purchases Above ₹50 Lakh: A Compliance Guide

Author : Piramal 120 | Published On : 15 Jun 2026

What Triggers TDS When You Buy a Flat in Mumbai

TDS (Tax Deducted at Source) under Section 194IA applies to all property purchases of ₹50 lakh or more. The buyer must deduct 1% from every payment made to the seller. This applies to both new bookings and resale transactions, with no exemptions for first-time buyers or women purchasers. The ₹50 lakh threshold is based on total property value, not individual installments—so a ₹2 crore flat triggers TDS from the booking amount itself.

Key TDS Rates and Calculation Rules

The standard TDS rate is 1% if the seller provides a PAN. Without a PAN, the rate jumps to 20% under Section 206AA. For resale properties, TDS is calculated on the higher of actual price or stamp duty value, with no tolerance limit since October 2024.

For construction-linked plans (CLP), common when you buy a flat in Mumbai, TDS applies to each installment. For example, a ₹2 crore purchase with ₹30 lakh, ₹50 lakh, and ₹40 lakh payments requires separate TDS deductions of ₹30,000, ₹50,000, and ₹40,000 respectively.

Filing and Special Circumstances

File Form 26QB within 30 days of each deduction on the TIN-NSDL portal. From April 2026, Form 141 replaces Form 26QB. Joint buyers each file for their proportionate share.

For NRI sellers, Section 195 applies instead, requiring TDS of approximately 12.5% plus surcharge and cess for long-term gains—significantly higher than resident seller transactions.

Missing deadlines incurs ₹200/day penalties capped at the TDS amount, making timely compliance essential. 

Visit Piramal Realty’s full report on the TDS on purchasing a flat in Mumbai in 2026 to know more.