Buying a Home with Multiple Owners? Handle TDS the Right Way

TDS on Property Purchases with Multiple Buyers and Sellers

Buying or selling property with family members or partners can be a milestone, but there is an important tax rule you cannot ignore: TDS (Tax Deducted at Source). Knowing how it works can help you avoid penalties and late fees.

1. The ₹50 Lakh Rule

If the total property value is ₹50 lakh or more, TDS must be deducted on the sale.

The ₹50 lakh limit applies to the total property value, not how much each person pays individually.

Even if your share is ₹20 lakh, but the total value is ₹60 lakh, TDS rules still apply.

2. Who Is Responsible?

When multiple parties are involved:

  • Every Buyer has to deduct and pay their share of TDS separately.
  • Every Seller pays tax based on the amount they receive.
3. How to Calculate the Tax

The standard TDS rate is 1 percent of the sale value. Each buyer calculates 1 percent on the exact amount they transfer to each seller.

Example
Total sale value: ₹1 Crore
Buyers: 3
Sellers: 3

Each seller receives: ₹33.33 lakh
TDS per seller: ₹33,330 (1%)
Split among 3 buyers: ₹11,110 each

In simple terms, take 1 percent of the money you are personally paying to a specific seller.

4. Must-Know Tips for Smooth Processing
  • PAN Cards: Buyers should collect PAN details early. If a seller does not provide PAN, the tax rate increases to 20 percent.
  • Form 26QB: Buyers must fill this form online. Each buyer-seller pair requires a separate form.
  • Seller Benefits: Sellers can adjust this TDS against their final tax or claim a refund.
Quick Checklist

• Check if the property exceeds ₹50 lakh
• Collect PAN cards from all parties
• Calculate 1% for each buyer-seller transaction
• Pay online and download TDS receipts