Step-by-Step Guide to TDS on Buying Apartments in Trivandrum

Posted onOct 20, 2025

Buying an apartment is one of the most significant financial decisions in anyone’s life. When investing in Trivandrum’s growing property market, understanding the tax implications is crucial. One key element every homebuyer must know is Tax Deducted at Source (TDS) on property purchases. Whether you are a first-time buyer or exploring Real Estate Investment Strategies in Trivandrum, this guide will help you understand every step involved in managing TDS effectively while buying an apartment.

What Is TDS on Property Purchase?

TDS (Tax Deducted at Source) is a tax collected by the government to ensure that taxes are deducted at the time of payment itself. As per Section 194-IA of the Income Tax Act, if you are buying a property worth ₹50 lakh or more, you must deduct 1% TDS from the sale consideration before making payment to the seller.

This rule applies to residential properties, including apartments in Trivandrum, and is meant to ensure that property transactions remain transparent and tax-compliant.

Step 1: Check If TDS Is Applicable

Before proceeding with the payment, confirm if your property purchase meets the TDS threshold.

• If the property value is ₹50 lakh or more, TDS is mandatory.
  
• If it’s below ₹50 lakh, TDS is not applicable.
  

Note that the TDS is calculated on the entire sale value, not just the portion exceeding ₹50 lakh. For example, if you buy a flat for ₹60 lakh, you must deduct ₹60,000 as TDS (1% of ₹60 lakh).

Step 2: Collect Seller Details

To deposit TDS, you’ll need the seller’s PAN (Permanent Account Number) and personal details. Ensure that the PAN mentioned in all sale documents matches government records. Any mismatch can delay the TDS process and create issues when filing returns.

Step 3: Deduct 1% TDS Before Payment

Before transferring the payment to the seller, deduct 1% TDS from the total sale value. For example, if your apartment costs ₹70 lakh, you should pay ₹69.3 lakh to the seller and deposit ₹70,000 as TDS to the government.

It’s important to remember that TDS must be deducted even if the payment is made in installments. Deduct 1% each time you make a payment to the seller.

Step 4: Deposit TDS Using Form 26QB

After deducting the tax, you need to deposit the TDS with the government using Form 26QB.
Here’s how:

1. Visit the TIN NSDL website.
   
2. Select Form 26QB (Payment of TDS on Sale of Property).
   
3. Enter details such as PAN of buyer and seller, property address, and sale consideration.
   
4. Pay the TDS amount online through net banking or generate a challan for offline payment.
   

You must deposit the TDS within 30 days from the end of the month in which the deduction was made.

Step 5: Issue TDS Certificate (Form 16B)

Once you’ve deposited the TDS, download Form 16B from the TRACES website and provide it to the seller as proof of tax deduction. This certificate allows the seller to claim credit for the TDS while filing their income tax return.

Step 6: Keep Documents for Future Reference

Always maintain a copy of the following:

• Form 26QB acknowledgment
  
• TDS payment challan
  
• Form 16B certificate
  
• Property sale agreement
  

These documents act as legal proof of compliance and will be required in case of future property verification or audit.

Why Understanding TDS Matters in Property Deals

For buyers, complying with TDS ensures you are not penalized by the Income Tax Department. If you fail to deduct or deposit TDS, you may face interest, penalties, or even disallowance of certain tax benefits.

For sellers, proper TDS documentation ensures that their income is correctly reported, reducing the chances of scrutiny or additional tax liability.

In short, timely and accurate TDS deduction helps both parties stay compliant and maintain a transparent transaction record, a vital step for Smart Investing in Trivandrum.

Additional Smart Real Estate Investment Tips

When buying apartments in Trivandrum, focus on projects that are RERA-approved, have clear titles, and are developed by reputed builders. This ensures a safe and legally compliant purchase. Always verify property documents before making any payment. Additionally, consider long-term factors like connectivity, neighborhood growth, and resale potential. These are essential Smart Real Estate Investment Tips that can safeguard your investment and yield better returns.

Conclusion

TDS on property purchases is not just a formality, it's a crucial legal obligation that protects both buyer and seller from future tax issues. By following these simple steps, you can ensure a smooth and compliant real estate transaction in Trivandrum. Understanding these guidelines early on helps you make confident, well-informed decisions when investing in your dream apartment.

Planning to invest in Apartments in Trivandrum? Stay informed with the latest TDS rules and real estate insights. Let us help you make an intelligent, profitable, and secure property investment.

FAQs

Is TDS applicable on all apartment purchases in Trivandrum?
No. TDS applies only if the total sale consideration of the property is ₹50 lakh or more. If the value of the apartment is below ₹50 lakh, you are not required to deduct TDS under Section 194-IA of the Income Tax Act.

How and when should I pay TDS after buying an apartment?
You must deduct 1% TDS from the total sale amount at the time of payment to the seller. The deducted amount should be deposited within 30 days from the end of the month in which the deduction was made, using Form 26QB available on the TIN NSDL website.

What documents are needed after depositing TDS for a property purchase?
Once you’ve paid the TDS, download Form 16B (the TDS certificate) from the TRACES website and provide it to the seller. Keep copies of Form 26QB, the payment challan, and your sale agreement as proof of compliance for future reference.