How To Download And File Form 26QB To Pay TDS On Sale Of Immovable Property

Income Tax

While purchasing a property, buyers are liable to pay various taxes. The Finance Act, 2013 made TDS (Tax Deducted at Source) applicable for transactions of immovable property worth Rs. 50 lakh or more as per Section 194IA of the Income Tax Act. Buyers are required to deduct TDS at the rate of 1% when making the payment for the property. Then, they have to obtain a Form 26QB to furnish information about their TDS. 

Here’s everything you need to know about Form 26QB, its use, how to download it, pay TDS through this Form 26QB and what could happen if TDS is not paid. Read on!

What is Form 26QB Used For?

Under Section 194IA of the Income Tax Act, buyers purchasing immovable properties such as a house or a plot of land have to deduct 1% TDS if the transaction value goes over Rs. 50 lakh. Afterwards, they have to pay the TDS using Form 26QB within 30 days from the month’s end when they deducted the TDS. 

It is a return-cum challan form that furnishes information about the TDS deduction. The online form is available on the TIN (Tax Information Network) website and is used to verify deducted tax. 

Now, let us look at various requirements for TDS on immovable properties.

Requirements of Section 194IA

• Only buyers are required to deduct TDS for transactions of Rs. 50 lakh or more while sellers have no such requirement. 
• If this payment is made in instalments, TDS is deductible on each instalment. 
• TDS deduction should be made at the time of payment or when crediting to the seller. 
• TDS is applicable to the whole transaction value. For example, if the property you have purchased costs Rs. 70 lakh, 1% TDS is applicable on Rs. 70 lakh and not on the amount above Rs. 50 lakh.
• At the time of making a TDS payment, both buyers and sellers have to submit a PAN. Otherwise, TDS will be charged at a 20% rate instead of the usual 1%.  
• After deducting TDS, buyers must send the TDS certificate to the seller. He/she can access this two weeks after depositing TDS via Form 26QB. The buyer also has to obtain Form 16B and submit it to the seller.  
• For immovable properties purchased after September 1 2019, their overall costs should include all charges required for the transfer of said property. This includes fees for maintenance, car parking, electricity, water, advance charges, club membership fees, etc.
• TDS under Section 194IA is applicable for all immovable properties, including commercial properties, residential properties and plots of land. However, it is not applicable to agricultural lands.

Steps to Download Form 26QB

Here are the steps one should follow to download Form 26QB:

Step 1: Visit the TRACES website and log in using your PAN number, user ID and password.

Step 2: Go to the Statements section and click on “request for justification report downloads”

Step 3: Select Form 26QB.

Step 4: After selecting the type of form, the user will be redirected to another page where he needs to fill in the relevant assessment year, PAN of the seller and acknowledgement number. Click proceed after that.

Step 5: After this individual will have to fill in the challan details as per Form 26QB. They need to enter the bank branch code, date of tax deposition, challan serial number and challan amount. Click on the “Proceed” option.

Step 6: A request for downloading Form 26QB has been generated. One can download the form from the “requested download” section once the request has been processed. 

The downloaded form is password protected and the password is PAN of the buyer in block letters.

Also read: TDS Deduction Process and Eligibility

Documents Required to File Form 26QB

One needs the following documents to file Form 26QB

• PAN of purchaser and seller of the immovable property. 
• Property sale deed.
• Challan details of TDS deposited. 
• Proof of Identity and Proof of address of both buyer and seller.

How to Pay TDS through Form 26QB Online?

Modes of Payment for TDS via Form 26QB

There are two options for TDS payment via Form 26QB. Choose ‘e-tax payment immediately to log in to your bank account and make payment. The bank will display Challan 280 with bank name, payment details, CIN and a tick on 800. You can print this for proof of payment of TDS.

You can also choose the tax payment option on a subsequent date to make an offline payment at an authorised bank. To do this, take a printout of the e-receipt of Form 26QB online and a unique acknowledgement number. Once you submit this with tax payment via cash or cheque to a bank, it will generate a challan. 

Implications of Non-filing or Late Filing of Form 26QB

There are different implications of not filing this form for the buyer and seller of the property. First, let’s see the implications of non-filing Form 26QB on the seller:

• The seller will not be able to claim TDS credit in case Form 26QB is not submitted on time. 

Now, let’s consider the implications of non-filing Form 26QB on the buyer:

• The IT Department is liable to levy a late filing fee on the buyer under Section 234E of the Income Tax Act. The fee is Rs. 200 for every day till the time failure of non-filing continues.
• The buyer is also liable to pay a late payment fee and interest on late payments under section 271H of the Income Tax Act. This penalty will be levied by the Assessing Officer on a case-by-case basis.

What Is Form 16B and How to Download It?

Form 16B is the TDS certificate issued to the seller by the buyer after the latter has deducted and submitted TDS to the government. After making payment via Form 26QB online, buyers have to furnish this certificate to sellers. The form is available for around 10-15 days after TDS payment.  

Follow the given steps to download Form 16B from the TRACE portal.

Step 1: First-time users on TRACES must register with their PAN and Challan number provided during TDS payment.

Step 2: Log in to the TRACES portal and select ‘Form 16B’ from the Downloads tab. 

Step 3: Enter the seller’s PAN, acknowledgement number and assessment year. Next, click on ‘Proceed’.

Step 4: Verify all details shown on the confirmation screen and click on ‘Submit Request’.

Step5: On successful submission of the download request, a request number will appear on the screen. 

Step 6: Go to ‘Requested Downloads’ on the ‘Downloads’ tab to download Form 16B. 

Also read: TDS on Professional Fees and Technical Fees

Final Word

Any buyer purchasing a new property has to deduct and pay TDS at a 1% rate of the overall sale within 30 days of the following month when they deducted it. They can use TIN NSDL’s website to submit the deducted tax using Form 26QB. Failing to submit this will result in various penalties.

FAQs on Form 26QB

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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.