In short
Selling a home in India costs you mainly tax on the gain, which is central and the same in every state, plus items that depend on your deal and your state. Under the Income-tax Act, 2025 (from 1 April 2026) a long-term gain on land or a building is taxed at 12.5%; see capital gains tax on property. If you are a resident and the property price or its stamp duty value is ₹50 lakh or more, the buyer must deduct 1% TDS and report it on Form 141 (section 393(1), Table 3(i)). Stamp duty and registration, the society’s rules and any brokerage are matters of your state, your agreement and your agent.
The costs, one by one
| Item | Rule | Source of the rule |
|---|---|---|
| Tax on the gain | Short-term (24 months or less) at your normal rates; long-term (more than 24 months) at 12.5%, with an indexation option for a resident individual or HUF who bought before 23 July 2024 | Income-tax Act 2025, sections 2(101), 197 |
| TDS by the buyer | 1% of the higher of the consideration and the stamp duty value, if ₹50 lakh or more, on a resident seller. This is an advance on your tax, not an extra cost | Section 393(1), Table 3(i) |
| Transfer expenses | Deductible from the gain if “wholly and exclusively in connection with such transfer” | Section 72(1)(a) |
| Prepayment of your home loan | No pre-payment charge on a floating-rate loan to an individual for non-business purposes sanctioned or renewed on or after 1 January 2026 | RBI Directions, 2 July 2025 |
| Agent | A real estate agent working on a project covered by the RERA Act must register with the state authority (section 9). Any brokerage is what you agree | MoHUA RERA FAQ |
| Stamp duty and registration on the sale deed | Set by your state. See stamp duty and registration charges in India. Who pays it is a point of the agreement | State |
| Society transfer formalities (flat) | See resale flat: housing society transfer | Society and state |
Tax on the gain
The gain is the full value of consideration minus the expenditure incurred wholly and exclusively for the transfer, minus the cost of acquisition and improvement (section 72). If you sell below the stamp duty value, section 78 deems the stamp duty value to be the price for the tax, unless it does not exceed 110% of the price. If you are a seller who is a non-resident, the position is different: see NRI selling property: TDS.
You can reduce or defer the tax by reinvesting the gain in a house or specified bonds. See capital gains exemptions: sections 82, 85 and 86.
The buyer’s TDS of 1%
For a resident seller, the buyer deducts 1% of the higher of (a) the consideration and (b) the stamp duty value when either is ₹50 lakh or more (the Act’s Note 3 says “equal to or greater than fifty lakh rupees”; the portal’s Form 141 page says “exceeds INR 50 Lakh”: follow the Act). The consideration is the total paid by all buyers to all sellers.
- The buyer files Form 141, Schedule B, with a PAN login. Form 141 replaced Forms 26QB, 26QC, 26QD and 26QE.
- Payment is due “within 30 days from the end of the month in which the deduction is made” and filing “within one month from the end of the month in which tax is deducted”, according to the Form 141 FAQ.
- Give the buyer your PAN. Without a PAN the higher rate of section 397(2)(b) applies, at least 20%.
- The 1% is credited against your final tax. If your tax on the sale is lower, claim the refund in your return. The buyer’s certificate is downloaded from TRACES, according to the portal FAQ.
The buyer pays no TDS under this provision for agricultural land. For a seller who is a non-resident, the buyer follows section 393(2), Table 17, at “rates in force”, and the seller can apply for a lower deduction certificate under section 395(1).
Clearing your home loan
If you have a home loan, ask the lender for the foreclosure statement and the process to get the title documents back once the loan is paid. Under the RBI Directions on pre-payment charges, a regulated lender shall not charge pre-payment charges on a floating-rate loan granted to an individual for a purpose other than business, for loans sanctioned or renewed on or after 1 January 2026. For an earlier loan, read the agreement. See home loan prepayment charges. If the buyer’s loan pays you, the sale proceeds may go first to your lender: settle this in the agreement.
What depends on your state
- Stamp duty and registration on the sale deed, and the stamp duty value (circle rate) used in the tax rules: see circle rate and guidance value.
- Mutation of the records in the buyer’s name after the sale: see mutation of property records.
- Housing society rules for a flat, and any fee the society charges: see resale flat: housing society transfer.
We did not read any official source on typical brokerage; it is a matter of agreement with the agent.
Documents to keep
Keep the sale agreement and deed, proof of the purchase price and improvement costs, bills for the sale expenses, the lender’s closure letter, and the TDS records the buyer gives you. They support the computation of the gain and any reinvestment relief.
What it costs
In summary: tax on the gain as computed under the Act, transfer expenses you have agreed to bear, any agent’s fee you have agreed to pay, and the state duties the agreement puts on you. The 1% TDS is not an additional cost; it is a payment on account of your tax.
Which professional to consult
A chartered accountant for the gain; a property lawyer (an advocate enrolled with the State Bar Council) for the sale agreement and deed; a real estate agent registered with the state RERA authority where the Act requires it; a registered valuer for the value of the property.
Frequently asked questions
Who pays the 1% TDS?
The buyer deducts it from the price and pays it to the government on Form 141, for a resident seller, when the consideration or the stamp duty value is ₹50 lakh or more. You get credit for it.
Does the buyer deduct 1% on a sale of agricultural land?
No under this provision: the Act’s entry covers immovable property “other than agricultural land”.
Can I sell without paying capital gains tax?
Not automatically. The reliefs in sections 82, 85 and 86 need reinvestment within the stated periods.
What if my buyer does not file Form 141?
The deduction and filing are the buyer’s obligation. Ask the buyer for proof of the deduction and the challan, and check that the TDS is credited to your PAN.
Are the costs the same in every state?
The tax is. Stamp duty, registration and society rules are not.
More guides on selling
Sources
- Income-tax Act, 2025 (Gazette of India Extraordinary), sections 72, 78, 393 and 395 (consulted 14 October 2026)
- Form 141 FAQs (Income Tax Department) (consulted 14 October 2026)
- Form 141: challan-cum-statement of deduction of tax (Income Tax Department) (consulted 14 October 2026)
- Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025 (consulted 14 October 2026)
- FAQs on the Real Estate (Regulation and Development) Act, 2016 (MoHUA) (consulted 14 October 2026)