Buying a Home? Missing TDS Rule Costs ₹1%/Month
When you buy a property worth ₹50 lakh or more, you must deduct 1% TDS from every payment to the builder. Miss the deposit deadline and you pay 1% interest per month — plus risk income tax notices.
That 1% monthly TDS interest on a ₹50L property works out to ₹500 per month — the price of roughly 25 cups of chai, forever compounding.
Interest you owe if TDS on your home purchase is deposited late
Key Takeaways
Check every builder payment receipt you have — if the total property value exceeds ₹50 lakh, confirm you deducted 1% TDS on each instalment and filed Form 26QB within 30 days.
File any pending Form 26QB immediately on the income tax e-filing portal (under TDS on property) to stop the ₹200/day penalty from accumulating further.
Download Form 16B (TDS certificate) from TRACES after each Form 26QB payment and hand it to the builder — without it, the builder cannot claim the TDS credit on their income.
When you buy a property worth ₹50 lakh or more, you must deduct 1% TDS from every payment to the builder. Miss the deposit deadline and you pay 1% interest per month — plus risk income tax notices.
Here's what happened: Under Section 194-IA, any homebuyer paying ₹50 lakh or more for a property must deduct 1% TDS on every instalment paid to the builder or seller.. The buyer must deposit this TDS within 30 days from the end of the payment month via Form 26QB — builder delays in sharing documents do not extend this deadline.. Missing the deposit deadline triggers interest at 1% per month from the due date, plus a ₹200-per-day penalty for late Form 26QB filing, both recoverable from the buyer..
What you should do: Check every builder payment receipt you have — if the total property value exceeds ₹50 lakh, confirm you deducted 1% TDS on each instalment and filed Form 26QB within 30 days.. File any pending Form 26QB immediately on the income tax e-filing portal (under TDS on property) to stop the ₹200/day penalty from accumulating further.. Download Form 16B (TDS certificate) from TRACES after each Form 26QB payment and hand it to the builder — without it, the builder cannot claim the TDS credit on their income..
Even if your home loan EMI is disbursed directly by the bank to the builder, the TDS obligation stays with YOU — banks do not deduct it on your behalf. Always deduct before the bank transfers funds.
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This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.
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