TDS and Stamp Duty Rules: If you are planning to buy a property this year, especially something above ₹50 lakh, then you should know that there are some important tax rules you must follow. Buying a house is not just about paying the price of the property. There are extra costs involved, and if you don’t follow these tax steps correctly, you might face penalties or delays.
According to the Income Tax Act, buyers have to deduct TDS when they make the payment and then give that amount to the government. You have to also pay stamp duty and registration charges which vary depending on the state rules and new property value rates, which are called circle rates or guideline values. These added costs can increase the final price of the property by quite a bit.
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When you buy a house worth more than ₹50 lakh, the rule says you must cut 1% TDS from the payment. This is under Section 194-IA of the Income Tax Act. But from April 1, 2025, this TDS must be calculated on whichever is higher either the actual sale price or the circle rate. This circle rate is also the value that is used to calculate your stamp duty. Once you deduct the TDS, you must submit it to the government using Form 26QB within 30 days from the date you bought the property.
After that, you also have to give Form 16B to the seller, which proves that you paid the TDS properly. If someone’s PAN is not linked with Aadhaar or is missing, then instead of 1%, the government can charge 20% TDS. This new rule also applies to people who buy property jointly with others. In such cases, the total value of the property will be checked to decide if TDS needs to be deducted.
Stamp duty is a big extra cost while buying property. Each state decides how much to charge, but it is usually between 3% and 8% of the property value. Then there is also a registration fee, which is normally 1% of the property price. These charges depend not only on the state but also on the gender of the buyer. For example, in Delhi, men are charged 6% stamp duty, while women pay 4%. In Maharashtra, women get a 1% lower rate on the usual 6%–7%, reported Money Control.
Uttar Pradesh also gives a 1% discount to women buying property worth up to ₹1 crore. They still charge 7% stamp duty and 1% for registration. Tamil Nadu has made changes in 2025 too. Now they follow a new guideline value system that considers the full area of the land and the built-up space when calculating the property’s worth.
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The reason why the government now calculates TDS based on the higher of sale price or circle rate is to stop people from showing lower property prices on paper. As more areas get developed, circle rates are also rising quickly, especially in cities like Ayodhya and nearby places around big cities.
even if you make a deal at a lower price, you might still have to pay higher stamp duty and TDS because of these updated rates. That’s why it’s a good idea to double check the latest circle rates from the official websites of your local municipal body or revenue department. In most states both TDS and stamp duty have to be paid online now and you should always save the digital receipts.
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