Form 26QB

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Under Section 194-IA of the Income Tax Act, 1961, the buyer of immovable property (land, building, etc.) worth more than Rs. If the property sale value exceeds ₹50 lakh, the buyer must deduct TDS at 1%. They must pay this TDS amount to the government by filing Form 26QB within 30 days from the end of the month in which they deducted TDS.

For example, if a property transaction occurs on June 15th, 2020, the TDS payment must be made by July 31st, 2020. However, this rule is only applicable to properties purchased after June 1st, 2013. If the property transaction took place before this date, no TDS payment is required under the Income Tax Act.

Key Requirements and Provisions for Form 26QB

Section 194-IA specifies the TDS rules associated with buying and selling immovable property:

TDS Deduction: A buyer must deduct 1% TDS from the sale value of the property at the time of the transaction if the property’s cost exceeds Rs. 50 lakh.
No TDS Requirement: TDS is not applicable if the property’s cost is below Rs. 50 lakh.
PAN Requirement: The PAN details of both the buyer and the seller are mandatory to deduct and pay TDS, but the buyer is not required to obtain a Tax Deduction Account Number (TAN).
Multiple Buyers/Sellers: If there are multiple buyers or sellers, separate Form 26QBs should be filed.
TDS on Instalment Payments: If the property payment is made in installments, the TDS should be deducted proportionately as the payments are made.
Form 16B Issuance: After paying the TDS, the buyer is required to issue Form 16B (TDS certificate) to the seller within 15 days.
Agricultural Land Exception: No TDS is applicable if the purchased property is agricultural land unless it meets specific conditions regarding its location and population density.

Penalty Charges Associated with Form 26QB

Failure to comply with TDS payment or filing Form 26QB within the stipulated time can lead to penalties:

Interest on Non-Deduction: 1% interest is charged for every month the TDS is not deducted.
Interest on Non-Remittance: 1% interest is charged on the amount not remitted to the government.
Late Filing Penalty: A penalty of Rs. 200 per day is levied under Section 234E if there is a delay in filing TDS returns.
Penalty for Non-Compliance: Under Section 271H, penalties ranging from Rs. 10,000 to Rs. 1 lakh can be imposed if the required TDS statement is not filed on time.

You may also want to know Form 15H

How to Fill Form 26QB Online

Filing Form 26QB online is a simple and systematic process. Here are the steps:

Visit the Official TIN NSDL Website: Go to the TIN NSDL website for TDS on the sale of a property.
Select the Online Form: Click on “Online Form to File TDS” and choose the appropriate challan.
Enter Buyer and Seller Information: Fill in all required details, such as the PAN of both the buyer and seller, property details, and transaction amount.
Review and Confirm: After entering the necessary details, click “Confirm” and note the acknowledgment number.
Print Form 26QB: Once confirmed, you can print the form for future reference.
Make Payment: Use the authorized banks’ net banking options (like ICICI Bank, SBI, HDFC, etc.) to complete the payment.
Generate Challan: Once the payment is complete, a challan with the payment details and CIN will be generated.

Form 26QB Download and Form 16B

Once the TDS is paid, Form 16B (TDS certificate) needs to be issued to the seller. You can download Form 16B by following these steps:

Log in to TRACES Portal: Register and log in using PAN details.
Enter Transaction Information: Provide the acknowledgment number, assessment year, and seller’s PAN.
Request Download: After submitting the request, note the download request number.
Download Form 16B: Use the request number to search and download Form 16B from the portal.

Conclusion

Form 26QB is a critical document for ensuring compliance with the TDS provisions under Section 194-IA of the Income Tax Act. Buyers of immovable property must file Form 26QB to remit the TDS amount to the government and issue Form 16B to the seller. It is essential to follow the guidelines and deadlines to avoid penalties.

Who is required to file Form 26QB?

Form 26QB must be filed by buyers of immovable property worth more than Rs. 50 lakh. The buyer is responsible for deducting and remitting the TDS.

What is the penalty for not filing Form 26QB on time?

If Form 26QB is not filed on time, a penalty of Rs. 200 per day will be charged under Section 234E. Additionally, interest will be charged on delayed payments and non-deduction of TDS.

What is the TDS rate for property transactions?

The TDS rate for property transactions under Section 194-IA is 1% of the sale value of the immovable property.

How can I make the TDS payment for Form 26QB?

The payment can be made online through net banking at authorized banks such as ICICI, HDFC, SBI, etc. After completing the payment, a challan with CIN details will be generated.

What is the difference between Form 26QB and Form 16B?

Form 26QB is used to remit the TDS to the government, while Form 16B is the TDS certificate issued by the buyer to the seller after the TDS has been paid.

Do I need a TAN for filing Form 26QB?

No, you do not need a TAN for filing Form 26QB. However, the PAN details of both the buyer and the seller are mandatory.