What taxes apply when I buy a plot?
When you buy a plot you pay stamp duty and a registration fee to the state, GST as applicable under the agreement, and you deduct 1% TDS from each payment if the price is ₹50 lakh or more. TDS is not an extra cost; it is part of the price that you deposit with the tax department for the seller.
TDS on property purchase
- Applies when the total price is ₹50 lakh or more (the total value of the property, even with several buyers).
- Rate: 1% of each payment, including every instalment.
- Since 1 April 2026 it falls under section 393 of the Income-tax Act, 2025, which replaced section 194-IA of the 1961 Act.
- Deposit through Form 26QB on the income tax portal and give the seller Form 16B.
- If the seller is a non-resident, different rules apply and TDS is deducted on the gain at higher rates.
Stamp duty and registration in Nagpur
Within Nagpur Municipal Corporation limits, stamp duty is 7% of the higher of the agreement value and the ready reckoner value, or 6% for a woman buying in her sole name. This includes a 1% metro cess and a 1% local body tax. The registration fee is 1%, capped at ₹30,000. Rates can differ outside city limits; your cost sheet shows the figure for your plot.
How is the profit taxed when I sell?
| Holding period | Type | Tax under current rules |
|---|---|---|
| 24 months or less | Short-term | Added to your income, taxed at your slab rate |
| More than 24 months | Long-term | 12.5% without indexation, plus surcharge and cess as applicable |
Can I save tax on the gain?
Reinvestment exemptions, known under the old Act as sections 54F (investing the sale proceeds in a residential house) and 54EC (specified bonds within six months, up to ₹50 lakh), continue in the new Act with similar conditions. Confirm current section numbers, limits and time windows with your CA before you sell.
Is there a tax benefit on a plot loan?
Not for the plot alone. Interest and principal deductions apply to a home loan for a constructed house, so a composite plot plus construction loan becomes eligible once construction is complete, under current rules.
What about NRIs?
- Pay from an NRE, NRO or FCNR(B) account or by inward remittance; a PAN is required.
- When an NRI sells, the buyer deducts TDS on the gain, so get a lower-deduction certificate if your actual tax is lower.
- Repatriation of sale proceeds is allowed within RBI limits. NRI buying guide.
General information as of 26 Oct 2026, not tax advice. Tax law changes; confirm with a chartered accountant.
Frequently asked questions
Is TDS applicable on a ₹63 lakh plot?
Yes. Because the price is ₹50 lakh or more, the buyer deducts 1% from each payment and deposits it through Form 26QB. On ₹63 lakh that totals ₹63,000 across all payments.
What is section 393 of the Income-tax Act, 2025?
It is the TDS provision that, from 1 April 2026, covers TDS on purchase of immovable property, replacing section 194-IA of the Income-tax Act, 1961. The 1% rate and the ₹50 lakh threshold are unchanged.
What is the capital gains tax on selling a plot?
If held for more than 24 months, gains are long-term and taxed at 12.5% without indexation, plus surcharge and cess. If held for 24 months or less, gains are taxed at your slab rate.
Can I avoid capital gains tax on land?
You may reduce or defer it by reinvesting in a residential house or specified bonds within the prescribed time, subject to conditions. Check current rules with your CA.
Do women get a stamp duty concession in Nagpur?
Yes. Within city limits, a woman buying residential property in her sole name pays 6% instead of 7%.