Two cousins who bought an apartment in Bellandur together for 80 lakh rupees in 2026, splitting it equally, assumed neither of them had to deduct tax because each share was only 40 lakh, comfortably under the 50 lakh mark. That assumption was already out of date. Since a rule change in October 2024, the 50 lakh threshold for tax deducted at source on a property purchase is measured on the total value of the property, not on each buyer's slice. Joint ownership changes almost every tax question a Bengaluru buyer or seller faces, and getting the split wrong invites notices from the tax department.

The short answer. For a jointly owned property, capital gains are taxed in each co-owner's hands in proportion to their ownership share, and each co-owner can claim their own exemptions on their share. On the purchase side, the 1 percent tax deducted at source under Section 194-IA now applies when the total property value is 50 lakh rupees or more, even if each buyer's individual share is below that, with a separate Form 26QB filed for every buyer and seller combination. The trade-off is added paperwork: joint deals multiply the number of forms, PANs and calculations, and errors are common.

The anchor fact for a Bengaluru buyer in 2026 is the aggregation rule, effective 1 October 2024, which judges the 50 lakh TDS threshold on the whole consideration. You can read the base provision on the official portal at incometax.gov.in. Capital gains and TDS on jointly owned property in Bengaluru therefore need each owner's share pinned down before you transact.

How are capital gains split when co-owners sell a property?

Capital gains on a jointly owned property are computed and taxed separately in each co-owner's hands, in proportion to their share, rather than lumped onto one person. So if two owners hold a flat equally and sell it at a gain, each is taxed on half the gain, and each reports it in their own return. This is settled practice rather than a single line of statute, and it flows from the principle that each co-owner is a separate taxpayer on their portion of the asset. For a couple who jointly own their home, this can be an advantage, because two smaller gains taxed separately may use exemptions and slabs more efficiently than one large gain on a single owner. Our guide to joint home loans and tax eligibility for couples in Bengaluru covers the ownership and funding side of that arrangement.

The mechanics of computing the gain itself do not change because there are two owners. Each owner starts from the same sale value and the same cost base, applies indexation or the adjusted cost as the law allows, and then takes their share of the result. The difference is only in who reports what. Our broader guide to capital gains tax when selling property in Bengaluru explains how the gain is calculated before it is divided, which is worth reading first if this is your first sale, because a small error in the cost base is doubled when it is split across two returns.

Can each co-owner claim their own capital gains exemption?

Courts have generally held that joint ownership does not by itself stop a co-owner from claiming an exemption such as Section 54 or 54F on their share of the gain. Each co-owner reinvests their portion, for example in another house or in specified bonds, and claims the exemption against their own share. That said, this area has been litigated, with different benches reaching different conclusions on specific facts, so the outcome can depend on the exact circumstances of a case. The safe course is to document each owner's share and reinvestment clearly, and to have a chartered accountant confirm the exemption for your situation before filing rather than assuming it applies automatically.

How does the 50 lakh TDS threshold work for joint buyers?

The 50 lakh threshold is now judged on the aggregate value of the property, not on each buyer's individual share, for transactions on or after 1 October 2024. Before that change, several tribunal rulings had allowed buyers to avoid TDS where each co-owner's share fell below 50 lakh even though the total exceeded it. That position no longer holds. Today, if the property changes hands for 50 lakh or more in total, the 1 percent deduction applies, and every buyer must account for it on their share. Because this is a threshold rule with penalty consequences for getting it wrong, confirm the current position on the official portal or with a chartered accountant before you close a joint purchase.

How many Form 26QB filings does a joint deal need?

A separate Form 26QB is required for each unique buyer and seller combination, based on their respective shares. So a purchase with two buyers and two sellers needs four filings, each showing that pair's proportionate share of the payment and the tax deducted on it. Two buyers and one seller means two filings. The deduction each buyer makes is on their share of the consideration, and each files and pays under their own PAN. The table below shows how the common joint scenarios play out for a Bengaluru buyer.

Getting the number of forms right matters, because a missing or wrongly filed 26QB can leave a seller unable to claim credit for the tax deducted, and can draw a notice for the buyer who failed to deduct.

How is each co-owner's share actually decided?

Ownership share is generally taken from the percentages stated in the sale deed, and where the deed is silent, tax authorities usually presume equal ownership. Where the actual funding differs from the nominal split, for example one spouse funded seventy percent of the cost while the deed records an equal share, the actual contribution can override the stated share for tax purposes, provided it is backed by bank records. This is why documenting who paid what, and stating shares clearly in the deed, is not a formality. It decides how the gain, the exemptions and the TDS credit are divided, and contemporaneous proof of contribution is what settles the point if the tax department asks. A common trap is a home funded largely by one spouse but registered equally for convenience, which can leave the funding owner unable to claim the full exemption they expected, so align the deed with the funding wherever you can.

How does the new Income-tax Act, 2025 affect joint owners?

The treatment continues in substance under the new law, with the section numbers renumbered. The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 and applies from the tax year 2026 to 2027. The apportionment of gains by share, the exemptions for reinvestment, the aggregate TDS threshold and the per pair Form 26QB requirement all carry forward. Only the numbering has moved, so older references to the previous section numbers still describe the right rules. For the exact current provisions and the filing utility, rely on the official portal rather than remembered section numbers, and treat any large or unusual joint transaction as a case for professional advice.

What should joint buyers and sellers check first?

Joint transactions reward careful documentation. Work through this checklist before you sign.

1. Fix each co-owner's ownership share and state it clearly in the sale agreement and sale deed.
2. Keep bank records showing how much each owner actually contributed to the purchase.
3. On a purchase of 50 lakh or more in total, plan for TDS even if each buyer share is below 50 lakh.
4. Count the buyer and seller combinations and file one Form 26QB for each pair.
5. Deduct and deposit each buyer share of the 1 percent TDS under that buyer own PAN.
6. On a sale, compute each owner gain separately and plan any Section 54 or 54F reinvestment per share.
7. Have a chartered accountant confirm the split, the exemptions and the filings before you transact.

We are buying jointly at 80 lakh split equally. Is TDS needed even though each share is 40 lakh?

Yes. Since 1 October 2024, the 50 lakh TDS threshold under Section 194-IA is judged on the total sale value, not each buyer share. So the 1 percent deduction applies on the full 80 lakh, even though no single buyer crosses 50 lakh individually. Confirm the current rule on the official portal or with a chartered accountant before closing.

My spouse and I are equal owners on the deed, but I funded most of the cost. Who owes capital gains tax?

Tax practice looks at actual funding, not only the deed percentage. If you contributed most of the cost and can show it through bank records, capital gains are generally attributed in that proportion between you and your spouse. The nominal equal split in the deed alone does not fix the tax split when funding clearly differs.

Can each of us separately claim a Section 54 exemption on our share when we sell jointly?

Generally yes. Courts have held that joint ownership does not by itself block a co-owner from claiming Section 54 or 54F on their own share of the gain or reinvestment. However, this rests on court rulings rather than plain statute, and outcomes are fact specific, so confirm your situation with a chartered accountant before filing.

How many Form 26QB filings do we need for two buyers and two sellers?

Four. A separate Form 26QB is filed for every buyer and seller pairing, so two buyers and two sellers means four forms, each showing that pair proportionate share of the payment and TDS. Whether TDS applies at all is decided on the total property value, not on any single pairing amount.

Last updated 2026-07-07. PropNewz Team.