Real estate transactions in Ratlam are increasing rapidly. Areas like Palace Road, Sailana Road, Dhanmandi, Chandni Chowk, Do Batti, Alkapuri, and newly developed colonies are witnessing regular buying and selling of plots, flats, shops, and commercial properties.

One very common question that buyers and sellers ask during registry is:

• Is TDS applicable on this property?
• When should TDS be deducted?
• What if payment is made in parts?
• What if there are multiple sellers?
• What if there are joint buyers?

This complete 2026 guide explains everything clearly and practically.

1. Legal Provision – Section 194IA

TDS on property is governed by the Income Tax Act, 1961 under Section 194IA.

As per this section:

If a person purchases immovable property (other than rural agricultural land) for ₹50 lakh or more, the buyer must deduct TDS at 1% of the sale consideration.

2. Basic Conditions for TDS Applicability

TDS applies when:

• Property value is ₹50 lakh or more
• Property is building, flat, land, shop, office
• Seller is resident
• Property is not rural agricultural land

Applies across India including Ratlam, Madhya Pradesh.

3. TDS Rate (Latest 2026 Position)

• 1% of sale consideration
• No surcharge
• No cess
• TAN not required
• PAN mandatory

If seller does not provide PAN → TDS rate becomes 20%.

4. MOST IMPORTANT: When Should TDS Be Deducted?

This is where most mistakes happen in Ratlam.

TDS must be deducted at the earlier of:

• At the time of payment
  OR
• At the time of credit

In simple words:

Whenever you pay money to seller, deduct TDS at that time.

5. Case 1 – Payment Made in Parts (Installments)

This is extremely common in Ratlam property deals.

Suppose:

Total Property Value = ₹60,00,000

Payment Schedule:

• Advance: ₹10,00,000
• Second Payment: ₹20,00,000
• Final Payment: ₹30,00,000

TDS must be deducted on EACH PAYMENT.

How?

1% on ₹10,00,000 = ₹10,000
1% on ₹20,00,000 = ₹20,000
1% on ₹30,00,000 = ₹30,000

Total TDS = ₹60,000

Important Rule:

TDS is not deducted only at registry.
It must be deducted whenever payment is made.

If advance paid in March and registry in May, TDS must be deducted in March itself.

This mistake is very common in Ratlam.

6. Case 2 – Multiple Sellers

Very common situation in Ratlam:

Example:

Property jointly owned by:

• Father
• Mother

Sale value: ₹80 lakh
Each seller share: ₹40 lakh

Now important question:

Is TDS applicable?

Answer:

Yes, if total sale consideration exceeds ₹50 lakh, TDS applies.

Even though each seller share is ₹40 lakh, total transaction is ₹80 lakh.

However, TDS must be deducted proportionately.

Example:

Buyer must deduct:
1% of ₹40 lakh from father
1% of ₹40 lakh from mother

Separate Form 26QB must be filed for each seller.

So:
2 sellers = 2 separate forms

7. Case 3 – Multiple Buyers

Example:

2 brothers jointly buy property for ₹70 lakh.

Each buyer share = ₹35 lakh

Is TDS applicable?

Yes.

Because total property value exceeds ₹50 lakh.

Each buyer must deduct TDS according to his share.

Example:

Buyer 1 deducts 1% of ₹35 lakh = ₹35,000
Buyer 2 deducts 1% of ₹35 lakh = ₹35,000

Each buyer files separate Form 26QB.

So:
2 buyers = 2 forms

8. Case 4 – Multiple Buyers and Multiple Sellers (Most Complicated Case)

This is very common in Ratlam family property deals.

Example:

2 buyers
2 sellers
Total value: ₹1 crore

Now number of combinations:

Buyer 1 → Seller 1
Buyer 1 → Seller 2
Buyer 2 → Seller 1
Buyer 2 → Seller 2

Total = 4 combinations

You must file 4 separate Form 26QB.

Many people in Ratlam make mistake by filing only one form.

This leads to notice from Income Tax Department.

TDS portal is managed by the Income Tax Department and system automatically tracks PAN mapping.

9. Stamp Duty Value vs Sale Value

Recent amendment provides:

If stamp duty value exceeds 110% of actual sale consideration, then TDS may be required on stamp duty value.

Therefore, before filing Form 26QB, compare:

• Agreement value
• Stamp duty value

Professional guidance is advisable.

10. Due Date of TDS Payment

TDS must be deposited within:

30 days from end of month in which deduction is made.

Example:

Payment made on 12 June
Due date: 30 July

Late payment attracts interest.

11. Interest and Penalty

If TDS not deducted:

Interest at 1% per month

If deducted but not paid:

Interest at 1.5% per month

Late filing fee:

₹200 per day

Penalty also possible.

Many property buyers in Ratlam receive notices due to ignorance.

12. Special Clarification – Rural Agricultural Land

TDS is not applicable on rural agricultural land.

However, if land is within Ratlam municipal limit, it may not qualify as rural.

Check carefully before assuming exemption.

13. Frequently Asked Questions

Q1. If property value is ₹49,99,000?

No TDS.

Q2. If seller does not give PAN?

20% TDS.

Q3. Is TAN required?

No.

Q4. If payment made before registry?

TDS required at time of payment.

Q5. Can seller deposit TDS himself?

No. Buyer must deduct.

14. Practical Ratlam Example – Complete Case

Property in Dhanmandi
Value: ₹90 lakh
2 buyers
3 sellers
Payment in 2 installments

In such case:

• TDS deducted on each installment
• Separate forms for each buyer-seller combination
• Multiple challans
• Careful calculation required

Wrong filing leads to mismatch in Form 26AS.

15. Why Professional Assistance is Important in Ratlam

Because:

• Installment confusion
• Joint ownership complications
• PAN mismatch errors
• Incorrect stamp value application
• Capital gain calculation impact
• Income tax notices

1% looks small but compliance mistake can create serious legal issue.

16. Capital Gains Impact on Seller

TDS is only advance tax.

Seller must calculate:

• Short-term capital gain
  OR
• Long-term capital gain

Seller can claim TDS credit in ITR.

If excess deducted → Refund possible.

17. Final Checklist Before Registry in Ratlam

✔ Check total sale value
✔ Check stamp duty value
✔ Collect PAN of all parties
✔ Identify number of buyers
✔ Identify number of sellers
✔ Deduct TDS on each payment
✔ File correct number of Form 26QB
✔ Download Form 16B

About the Author

CA Manish Gugliya
Manish Gugliya & Company
Chartered Accountants – Ratlam, Madhya Pradesh

Expert in:

• Property Taxation
• TDS Compliance
• Capital Gains Advisory
• Income Tax Notices
• Litigation & Representation

Serving areas: Palace Road, Sailana Road, Dhanmandi, Do Batti, Chandni Chowk, Alkapuri and across Ratlam district.

Conclusion

TDS on property under Section 194IA is mandatory when property value is ₹50 lakh or more.

Remember:

• Deduct 1%
• Deduct at time of each payment
• Separate forms for each buyer-seller combination
• Deposit within 30 days
• Issue Form 16B

Proper compliance ensures smooth transaction and avoids future income tax notice.

If you are buying or selling property in Ratlam and want safe, correct TDS filing, consult a qualified Chartered Accountant before making payment.