New TDS reporting rules for property buyers take effect October 1, 2026: what to check before you pay

A reporting change for TDS on property purchases is due to apply from 1 October 2026, according to reporting by CAclubindia. If you are buying a property, the headline point is that the buyer's tax deduction paperwork is being tightened. The 1% deduction itself, as commonly understood, is not what the report is about.

For most buyers the immediate meaning is simple: expect to be asked for more accurate seller details and cleaner filing, and do not assume your old checklist is enough for a registration or payment after 1 October 2026. The full text of the changes was not part of the headline, so read the official notification or ask your chartered accountant before you pay.

This article explains the standing TDS rules on property, how the deduction works in rupees, and what to prepare, without guessing at details that have not been confirmed.

Key takeaways

• As reported by CAclubindia, new reporting rules for TDS on purchase of property apply from 1 October 2026.
• The long-standing rule is that a resident buyer deducts 1% TDS when the consideration is ₹50 lakh or more, and deposits it against the seller's PAN.
• The buyer, not the seller, carries the compliance burden, so errors land on the buyer first.
• A reporting change does not alter your home loan EMI, eligibility or interest rate.
• Instalment purchases need TDS on every payment, not just once.
• Confirm exact new requirements from the official notification before paying on or after 1 October 2026.

What the reported change is, and what is not known

According to CAclubindia, the TDS rules on property purchases come with new reporting requirements from 1 October 2026. The headline does not tell us the specific forms, fields, deadlines or penalties involved, and this article does not guess at them. What we can say with confidence is the framework they sit on.

TDS on property is the mechanism by which the tax department tracks large property transactions at the point of sale. The buyer withholds a small percentage from the payment to the seller and deposits it with the government. The reporting side is how the buyer tells the department who paid whom and how much. A change in reporting is therefore about the data trail: which details must be given, in what form, and by when.

For readers, the useful framing is this: the money is the same, the proof has to be better.

How TDS on property purchase works today

Under the standing rule for resident sellers, a buyer who pays ₹50 lakh or more for immovable property, other than agricultural land, deducts TDS at 1% of the consideration. The same applies where the property is a flat, a house, a plot or a commercial unit.

The usual sequence is:

1. The buyer collects the seller's PAN and agrees the consideration.
2. At the time of payment or credit, whichever is earlier, the buyer deducts 1%.
3. The buyer deposits the amount using the prescribed challan-cum-statement, commonly known as Form 26QB, within the standard time after the end of the month of deduction.
4. The buyer then gives the seller a TDS certificate so the seller can claim credit in their own tax return.

Buyers do not need a separate TAN for this. They file using their own PAN, which is why it is a personal responsibility even for a first-time buyer.

What it costs in rupees: worked examples

The table below shows the 1% deduction at different deal sizes. It uses the standing rule, not any new rate. The figure is deducted from what you pay the seller, so it is not an extra charge on top of the price.

Agreed consideration	TDS applies?	TDS at 1%	Cash to seller after TDS
₹49,00,000	No (below ₹50 lakh)	₹0	₹49,00,000
₹50,00,000	Yes	₹50,000	₹49,50,000
₹80,00,000	Yes	₹80,000	₹79,20,000
₹1,50,00,000	Yes	₹1,50,000	₹1,48,50,000
₹3,00,00,000	Yes	₹3,00,000	₹2,97,00,000

The point worth noticing is the cliff at ₹50 lakh. A deal at ₹49 lakh has no TDS, while one at ₹50 lakh is covered. Splitting a price to avoid the threshold is the sort of thing that reporting tightening is designed to catch, and it is not advisable.

What changes for buyers and sellers in practice

Without the exact text, the safest reading is that more depends on getting details right the first time. Buyers should expect to be asked for, and should be ready to supply, accurate information about the seller, the property and the payment schedule.

For home loan borrowers, there is one more layer. Your lender usually disburses the loan to the seller or builder against the agreement. TDS is a separate obligation that you must see to, so the person who owns the filing should be agreed before the first disbursement. If you are still choosing a loan, home loan EMI guides explain how the repayment side works, and the EMI calculator lets you test affordability on the full price.

Sellers should check that their PAN is valid and linked, and that the name on the sale agreement matches the PAN record exactly. A mismatch is the most common reason credit does not show up for the seller.

Who is affected and who is not

Most affected:

• Resident buyers of flats, houses, plots and commercial units priced at ₹50 lakh or more.
• Buyers of under-construction property paying in stages, since each payment is a deduction event.
• Sellers who depend on seeing the TDS credit before filing their return.

Generally not affected by the 1% rule:

• Deals below ₹50 lakh in consideration.
• Agricultural land in rural areas, which is outside the scope of this TDS provision.
• Anyone whose purchase has been fully completed and paid before the new date, though you should confirm the transition wording once published.

Cases involving a non-resident seller follow a different and much heavier TDS regime, and are best handled with professional advice.

What to do now: a buyer's checklist

If you are planning to buy before or after 1 October 2026, work through this list.

1. Ask the seller or builder for PAN and confirm it matches the name on the agreement.
2. Write down the full consideration and the payment schedule, including every instalment date.
3. Decide in writing who will compute and deposit the TDS, and by what date.
4. Keep the challan acknowledgement and the TDS certificate in one folder, digital and printed.
5. Check the official notification for the new reporting requirement before your first payment on or after 1 October 2026.
6. If the deal is large or complicated, ask a chartered accountant to review the structure before registration.

If you also need financing, check your eligibility first, and compare current interest rates so that the TDS cash-flow does not catch you short at the time of payment.

Common mistakes to avoid

• Deducting TDS only on the base price when other amounts paid to the seller form part of the total payment. Ask your accountant what counts.
• Missing the deposit deadline. Late deposits attract interest and a late fee.
• Using a wrong or unlinked PAN. A missing or invalid PAN can lead to a higher rate of deduction.
• Assuming the builder will handle it. The legal duty is the buyer's.
• Paying part of the price in a way that cannot be traced. This makes reporting inconsistent and invites notices.
• Treating the reporting change as a loan matter. It is a tax matter, and your lender's rate and EMI are not affected. For wider updates, see the news hub.

Frequently asked questions

Is there a new TDS rate on property from 1 October 2026?

The reporting by CAclubindia refers to new reporting rules, not a new rate. The long-standing rate for resident sellers is 1% on consideration of ₹50 lakh or more. If a rate change is announced, it will appear in the official notification, so verify it there.

Who has to deduct TDS on a property purchase?

The buyer deducts it from the payment to the seller and deposits it with the government against the seller's PAN. This applies even to a first-time individual buyer. The buyer then provides a certificate to the seller.

Does the TDS increase my home loan EMI?

No. TDS is deducted from the payment due to the seller, so it does not change the loan amount, interest rate or EMI. You can test your repayment on the full purchase price with an EMI calculator.

What if I pay the builder in instalments?

TDS applies to each payment where the deal falls under the rule, so you will have to deduct and deposit for every instalment. Keep a schedule so that no instalment is missed. Ask your accountant how the threshold applies to your agreement.

What should I do before 1 October 2026?

Gather the seller's PAN, the agreement, and the payment schedule, and read the official notification for the reporting specifics. If your registration or a large payment falls close to the date, get a professional to confirm which process applies.