Section 194IA TDS on Property Sale: Tally Entry [2026]
Section 194IA TDS on Property Sale: Tally Entry [2026]
Record Section 194-IA TDS on property sale in Tally Prime. Check ₹50 Lakh threshold, 1% deduction rate, Form 26QB filing, and buyer journal entries.
Who is this for: Tax Compliance
Quick Answer: How to Record Section 194-IA TDS on Property Sale in Tally Prime?
Under Section 194-IA, the buyer of an immovable property valued at ₹50 Lakhs or more must deduct 1% TDS from the sale consideration. In Tally Prime, record the purchase in F9, deduct 1% TDS in Journal (F7) crediting "TDS on Property 194-IA", and file Form 26QB on the TRACES portal within 30 days.
- Statutory Threshold: Applicable when property consideration or stamp duty value ≥ ₹50 Lakhs
- Deduction Rate: 1% of total transaction value (20% if seller lacks valid PAN)
- Reporting Form: Form 26QB filed on TRACES within 30 days of the end of the month
- Tally Setup: Create TDS on Property ledger grouped under Duties & Taxes
When a business or individual purchases immovable property — land or a building — valued at ₹50 lakh or more from a resident Indian, the buyer is required to deduct TDS at 1% under Section 194IA of the Income Tax Act. This obligation applies to businesses purchasing commercial premises, warehouses, or factory premises.
This guide explains how to record this transaction in Tally Prime for both the buyer and the seller.
1. Section 194IA — Key Provisions
- Who Deducts: The buyer (purchaser) of the immovable property.
- TDS Rate: 1% of the total sale consideration.
- Threshold: Applicable only when the property value exceeds ₹50 lakh.
- PAN Requirement: If the seller does not provide PAN, TDS is deducted at 20%.
- Form: TDS is deposited using Form 26QB (online, on the income tax portal).
- Due Date: Within 30 days from the end of the month in which TDS is deducted.
2. Buyer's Tally Prime Entries
Step 1: Create Required Ledgers
- "Immovable Property (Asset)" — under Fixed Assets.
- "TDS Payable u/s 194IA" — under Current Liabilities (Duties & Taxes).
Step 2: Record the Purchase
Record a Journal Voucher (F7) on the purchase date:
Credit: Seller's Ledger (Net: ₹74,25,000)
Credit: TDS Payable u/s 194IA (1%: ₹75,000)
Step 3: Record TDS Payment via Form 26QB
After paying the TDS via the income tax portal:
Credit: Bank Account
3. Seller's Tally Prime Entries
For the seller, record the property sale and the TDS deducted by the buyer:
Credit: Property / Fixed Asset (book value)
Credit: Profit on Sale of Asset (gain, if any)
When the net payment arrives (after TDS):
Debit: TDS Receivable u/s 194IA (₹75,000)
Credit: Buyer's Ledger (Full: ₹75,00,000)
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