Who will pay 1% TDS on sale of property?

Under applicable tax regulations, the buyer is responsible for deducting and paying the 1% TDS (Tax Deducted at Source) on the sale of property, when the transaction value exceeds the government-specified threshold set under current tax law.

Buyer's Responsibility

• The buyer must deduct 1% of the total sale consideration before making payment to the seller
• This applies regardless of whether the payment is made in a lump sum or in installments
• The deducted amount must be deposited with tax authorities within the prescribed deadline

How the Process Works

• Buyer deducts 1% TDS from the total agreed sale value
• Remaining 99% of the amount is paid directly to the seller
• Buyer files the required TDS form, such as Form 26QB, to report the deduction
• The seller can later verify the deducted amount through their tax records

Consequences of Non-Compliance

• Failure to deduct or deposit TDS can result in penalties and interest charges for the buyer
• The seller may face difficulties claiming TDS credit if not properly reported
• Delayed filing can also attract additional late fees

Since the responsibility falls on the buyer, it is essential to understand the applicable threshold and deadlines before completing a high-value property transaction, ensuring full compliance and avoiding unnecessary penalties for both parties involved in the deal. Speaking with a qualified local professional before making a final decision is always recommended, since rules, requirements, and market practices can vary by region and change over time. Reviewing the relevant documentation carefully and asking questions upfront can save considerable time, money, and stress later in the process. Keeping copies of all related paperwork organized and easily accessible also makes future transactions, audits, or disputes far easier to navigate.