TDS on Sale of Property and Rent: Form 141 vs Form 140 Under the Income Tax Act 2025

Under the Income Tax Act 2025, a buyer who pays a resident seller for an immovable property (other than agricultural land) deducts 1% of the higher of the sale consideration or the stamp duty value, once either figure reaches Rs 50 lakh. The authority is section 393(1), Table Sl. No. 3(i). The tax is deposited within 30 days from the end of the month of deduction with a challan-cum-statement in Form 141. Rent paid by a person who is not a "specified person" works the same way. Everything else on the deduction side usually goes through the quarterly statement, Form 140.

This guide explains both transactions side by side, then shows which payments use Form 141 and which use Form 140. Every figure is from the Act (as amended by the Finance Act, 2026) and the Income-tax Rules, 2026. Examples use tax year 2026-27. Last reviewed against that text on 10 November 2026.

What is the TDS rate on sale of property under the Income Tax Act 2025?

Section 393(1), Table Sl. No. 3, covers payments on the transfer of immovable property other than agricultural land. It has three rows:

Row	Payment	Rate	Threshold
3(i)	Consideration for transfer of immovable property (other than agricultural land)	1% of the consideration or the stamp duty value, whichever is higher	Rs 50 lakh (consideration or stamp duty value equal to or above this, Note 3)
3(ii)	Consideration, not in kind, under the agreement referred to in section 67(14)	10%	Nil
3(iii)	Compensation or consideration on compulsory acquisition of immovable property (other than agricultural land)	10%	Rs 5,00,000

Note 2 says that where both 3(i) and 3(ii) could apply to the same consideration, tax is deducted under 3(ii) only. Section 67(14) deals with an individual or HUF who transfers land or building under a specified agreement, such as a development arrangement.

The rest of this guide is about row 3(i), the ordinary sale of a flat, plot or building. For agricultural land, see our post on the agricultural land exemption.

Who deducts the TDS, and is a TAN needed?

The buyer deducts it. Section 393(1) applies where a sum is credited or paid to a resident, and the person paying deducts tax on the entire amount once the threshold is crossed (section 393(1)(a)), not only on the excess over Rs 50 lakh.

Section 397(1)(c)(i) says a person deducting under Sl. No. 2(i), 3(i) or 6(ii) does not need to apply for a TAN (tax deduction account number). An individual buying a flat therefore does not register for a TAN. The deductor still has to pay the tax and file the statement, and the seller must give a valid PAN (section 397(2)(a)).

Where several buyers pay one seller, Note 1 treats the consideration as the aggregate of what all transferees pay to all transferors for that property when testing the Rs 50 lakh threshold.

When is the tax deducted?

Section 393(1)(c): at the time the consideration is credited to the seller's account, or when it is paid (in cash, cheque, draft or any other mode), whichever is earlier. A token amount or advance paid first can therefore trigger the deduction time. The Rs 50 lakh test and the 1% base both use the whole consideration or the stamp duty value, as set out in Note 3.

How is TDS on property calculated? Worked examples

Example 1: stamp duty value is higher than the price. Ravi buys a flat from Meena, a resident. Assumptions: tax year 2026-27, both parties have PAN, a single buyer.

Step	Working	Amount
Sale consideration	Agreement value	Rs 80,00,000
Stamp duty value	As per the registry	Rs 90,00,000
Threshold met?	Both are above Rs 50 lakh	Yes
Base for 1%	Higher of the two	Rs 90,00,000
TDS at 1%	90,00,000 x 1%	Rs 90,000
Paid to Meena	80,00,000 - 90,000	Rs 79,10,000

Example 2: price below Rs 50 lakh, stamp duty value above it. Assumptions: tax year 2026-27, resident seller with PAN.

Case	Consideration	Stamp duty value	Threshold met?	TDS at 1%
A	Rs 45,00,000	Rs 52,00,000	Yes, stamp duty value is above Rs 50 lakh (Note 3)	1% x 52,00,000 = Rs 52,000
B	Rs 48,00,000	Rs 48,00,000	No	Nil under Sl. No. 3(i)
C	Rs 50,00,000	Rs 50,00,000	Yes, "equal to or greater" (Note 3)	1% x 50,00,000 = Rs 50,000

Example 3: rent for comparison. A tenant who is not a specified person pays Rs 60,000 a month in 2026-27. Under section 393(1), Sl. No. 2(i), the rate is 2%, and under Note 1 the deduction is made once, when the rent for the last month of the tax year or of the tenancy (whichever is earlier) is credited or paid. For a full year the rent is 60,000 x 12 = Rs 7,20,000, and 7,20,000 x 2% = Rs 14,400. Our guide to TDS on rent covers the rent rules in full.

What if the seller gives no PAN?

Section 397(2)(b)(i): tax is deducted at the higher of the rate in the provision (1% here), the rate or rates in force, or 20%. On the Rs 90,00,000 base in Example 1, 20% alone would be Rs 18,00,000. The cap in section 397(2)(e) applies to rent only, not to property sales.

What if the seller is a non-resident?

Section 393(1) applies to payments to residents. A payment to a non-resident falls under section 393(2), Table Sl. No. 17 (interest or any other sum chargeable under the Act, not being salary), at "rates in force". Under section 397(1)(c)(iii), a resident individual or HUF buying immovable property and deducting under that serial number does not need a TAN. Rule 218(3)(e), inserted with effect from 1 October 2026, brings that deduction into the Form 141 route as well. The files do not set out the actual rate or how to work out the chargeable portion, so a CA should confirm the figure.

Form 141 vs Form 140: which one do you file?

Form 141 is a challan-cum-statement. It is the payment and the report in one step, replacing the usual quarterly statement for a short list of deductions (rule 219(5)). Form 140 is the quarterly statement filed after tax has been paid on the normal challan (rule 219(1)).

Deduction	Deposit	Report
Rent, payer not a specified person (393(1), 2(i))	Within 30 days from the end of the month of deduction (rule 218(3)(a))	Form 141
Sale of immovable property, 1% (393(1), 3(i))	Within 30 days from the end of the month (rule 218(3)(b))	Form 141
Contract work, professional fees, commission or brokerage (393(1), 6(ii))	Within 30 days from the end of the month (rule 218(3)(c))	Form 141
Transfer of a virtual digital asset (393(1), 8(vi))	Within 30 days from the end of the month (rule 218(3)(d))	Form 141
Resident individual or HUF paying for immovable property under 393(2), Sl. No. 17	Within 30 days from the end of the month (rule 218(3)(e))	Form 141
Rent, payer a specified person (393(1), 2(ii)); compensation on compulsory acquisition (3(iii)); other 393(1) deductions apart from 8(iii)	By the 7th of the next month, 30 April for March (rule 218(2))	Quarterly Form 140 (rule 219(1), Sl. No. 3)
Section 393(2) deductions where the payee is a non-resident (not a company) or a resident but not ordinarily resident	As per rule 218(2)	Quarterly Form 144 (rule 219(1), Sl. No. 2)

When are the Form 141 and Form 140 dates?

For Form 140, rule 219(4) sets the quarterly dates: 31 July (quarter ending 30 June), 31 October (30 September), 31 January (31 December) and 31 May (31 March quarter, in the year after the tax year of deduction).

Real-life examples

• Ravi, first-time buyer. He buys a flat from Meena for Rs 70,00,000, registered at a stamp duty value of Rs 72,00,000. The higher figure is Rs 72,00,000, so 1% is Rs 72,000. The tax falls due at the earlier of credit or payment (section 393(1)(c)), so the deduction time can arrive with the first payment. Ravi needs no TAN and files Form 141 within 30 days from the end of the month he deducts in.
• Kavita, landlord, and a tenant company. Kavita rents a shop to a private limited company for Rs 1,20,000 a month. A company is a specified person, so rent is under Sl. No. 2(ii) at 10%: Rs 12,000 each month, deposited by the 7th of the next month. The company reports it in the quarterly Form 140, not Form 141.
• Imran, buyer of a Rs 48 lakh plot. Both his price and the stamp duty value are below Rs 50 lakh, so there is no deduction under Sl. No. 3(i). Had the stamp duty value been Rs 51 lakh, he would have deducted 1% of Rs 51 lakh.

What are the common mistakes?

• Testing only the agreement price. The threshold also looks at the stamp duty value, and the 1% is applied on the higher figure.
• Deducting only on the amount above Rs 50 lakh. Once the threshold is met, the tax is on the entire amount.
• Mixing up the forms. Rent from a specified person goes through Form 140. Rent from anyone else, and a normal property sale, go through Form 141.
• Waiting for the quarter end. Form 141 is due within 30 days from the end of the month of deduction, not with the quarterly return.
• Forgetting the PAN. Without the seller's PAN, the rate is at least 20% (section 397(2)(b)(i)).
• Applying the resident rule to a non-resident seller. A non-resident falls under section 393(2), not section 393(1).

Quick reference

Item	Property sale (Sl. No. 3(i))	Rent, non-specified payer (Sl. No. 2(i))
Rate	1% of the higher of consideration or stamp duty value	2%
Threshold	Rs 50 lakh	Rs 50,000 for a month or part of a month
TAN	Not needed	Not needed
Deposit and report	30 days from end of month, Form 141	30 days from end of month, Form 141
No-PAN rate	Higher of 1%, rate in force, 20%	Same, but capped at last month's rent

Does the buyer give the seller a TDS certificate, and can the seller ask for a lower rate?

Yes to the certificate. Section 395(4)(a) requires every deductor to issue a certificate stating the tax deducted, the rate and other prescribed particulars. For deductions under Sl. No. 2(i), 3(i), 6(ii) and 8(vi) of section 393(1), rule 215(1) prescribes Form 132, due within fifteen days from the due date for the Form 141 challan-cum-statement. For a deduction on 15 August, Form 141 is due on 30 September, so Form 132 is due by 15 October. Rent from a specified person and other Form 140 deductions use Form 131 instead.

A seller who expects to owe little or no tax can apply to the Assessing Officer under section 395(1) for a certificate for deduction at a lower rate or no deduction. Once issued, the buyer deducts at the rate in the certificate for as long as it is valid (section 395(1)(c)). Ask the seller for it before the first payment.

Where this is in the Act

• Section 393(1), Table Sl. No. 2 and 3, and Notes 1 to 3: rent and property sale deduction.
• Section 393(2), Table Sl. No. 17: payments to non-residents.
• Section 397(1)(c) and (2): TAN exemption and PAN requirement.
• Section 395(1) and (4): lower-deduction certificate and TDS certificate. Rule 215(1): Forms 131 and 132.
• Section 402(37): specified person. Section 67(14): specified agreement.
• Rule 218(2), (3): deposit dates and Form 141. Rule 219(1), (4), (5): Forms 140, 144 and 141, and quarterly due dates.

How do CA firms keep track of buyer TDS across clients?

For a practice, the hard part is the calendar: a Form 141 date is a rolling 30 days from month end, a Form 140 date follows the quarter, and a client may have both in the same month. Finexo's practice management software for CAs keeps these dates against each client so nothing is found out late. It does not compute the tax or file the forms for you.

This article explains the Income-tax Act, 2025 (as amended by the Finance Act, 2026) and the Income-tax Rules, 2026. It is general information, not tax advice. Confirm the position for a specific transaction with a qualified chartered accountant.