Property withholding tax: sections 236C and 236K after Finance Act 2026
Sections 236C and 236K govern withholding tax on immovable property transactions – sale/transfer and purchase respectively. Both were meaningfully changed under Finance Act 2026.
Sale or transfer of immovable property (section 236C)
Under Finance Act 2026, this section was simplified from a value-tiered structure to a single flat rate:
| Active Filer | 2.75% of the gross consideration received |
|---|---|
| Non-Filer | 11.5% of the gross consideration received |
This tax is deducted by the person responsible for registering or attesting the transfer, at the time of sale.
Purchase of immovable property (section 236K)
The purchaser-side rate structure also changed. Active Filers now pay a flat rate regardless of property value, while Non-Filer rates remain tiered by fair market value:
| Active Filer | 1.25% of fair market value, at any property value |
|---|---|
| Non-Filer, where fair market value does not exceed Rs. 50 million | 10.5% |
| Non-Filer, where fair market value exceeds Rs. 50 million but not Rs. 100 million | 14.5% |
| Non-Filer, where fair market value exceeds Rs. 100 million | 18.5% |
Why this change matters
Previously, both sections used value-based tiers even for Active Filers, meaning the rate you paid depended on the property's value bracket. Finance Act 2026 flattened the Active Filer rate for both sections into a single percentage regardless of value – a meaningful simplification for buyers and sellers who are on the Active Taxpayers List. Non-Filers, however, still face steep, tiered rates on the purchase side that scale up sharply with property value.
Given how substantial these amounts can be on higher-value property, confirming your Active Filer status before a transaction closes can make a real difference to your final cost. Our withholding calculator reflects both of these updated rates. For a review of a specific upcoming property transaction, contact our team.