How To Download And File Form 26QB To Pay TDS On Sale Of Immovable Property
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?
Follow the steps below to pay TDS through form 26qb online:
- Step 1: Go to the official website of TIN
Visit the official website of Tax Information Network and click on the ‘Services’ tab.
- Step 2: Click on the option e-Payment: Pay Taxes Online
A dropdown menu will appear. Click on ‘e-Payment: Pay Taxes Online’.
- Step 3: Click on TDS on Property (Form 26QB)
On the new page, find ‘TDS on Property (Form 26QB)’ and click on ‘Proceed’.
- Step 4: Fill out the given form within the allotted time (30 minutes)
Enter all the details. Make sure you have the following information at hand before filling it out:
– Name of buyer/seller
– PAN of seller/buyer
– Property details
– Contact information of buyer/seller
– Tax deposit details
On the Taxpayer Information page, enter the tax code (0020 for corporate or 0021 for non-corporate payer), residential status, buyer’s PAN and seller’s PAN.
- Step 5: Enter other details
On the next two tabs, enter the full address of the transferee, transferor and property purchased. Next, fill in the payment amount in words and figures along with the tax amount deposited.
- Step 6: Make the payment
Choose the mode of payment on the next page. You have two options- ‘e-tax payment immediately’ or ‘e-tax payment on the subsequent date’. Next, click on ‘Proceed’ and pay the TDS amount that you deducted.
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
Ans: In the case of joint transactions, each buyer has to file Form 26QB for each unique buyer-seller combination. For example, if there are two buyers and one seller, two forms will have to be filled. For three buyers and three sellers, buyers have to fill out a total of nine forms.
Ans: Deductors can view the acknowledgement number for Form 26QB in his/her annual tax statement (Form 26AS). They can also view this on the TRACES portal or the Protean-TIN website. It is necessary to enter the buyer and seller’s PAN, total payment and assessment year for retrieving this number.
Ans: The following penalties are applicable for non-filing Form 26QB:
For non-deduction of TDS: Penalty of 1% on TDS every month
Non-remittance: 1.5% per month till the date of payment
Late filing: Rs. 200 per day u/s 234E
Penalty u/s 271H: From Rs. 10,000 to Rs. 1 lakh
Ans: Yes, the Income Tax Department receives AIR (Annual Information Return) for all taxpayers recording purchase and sale of a property. From this report provided by the registrar/sub-registrar, they can figure out if you have made a property transaction over Rs. 50 lakh.
Ans: These are some of the banks authorized to receive payment for Form 26QB:
State Bank of India
ICICI Bank
Indian Bank
Axis Bank
Punjab National Bank
Indian Overseas Bank
HDFC Bank
Bank of Maharashtra
Central Bank of India
IDBI Bank
Bank of Baroda
Ans: Yes, TAN is mandatory for making deductions under TDS. TAN is a ten-digit alphanumeric number allotted by the IT Department for taxpayers who deduct or collect tax at the source.
Ans: Yes, PAN or permanent account number of seller is mandatory to file TDS return or Form 26QB. Buyers who are deducting TDS must acquire or have the PAN of the seller for the transaction to take place.
Ans: Taxpayers can view the total TDS deducted from various transactions through Form 26AS. They need to visit the e-filing portal of the IT Department and log in using their credentials. After this, they must go to “view Form 26AS section” , select the assessment year and download the PDF of form 26AS.
Ans: Yes, a taxpayer can make amendments to Form 26QB or file a revised form to make up for any errors made while filing the original form. They must log in to their TRACES account and select “online correction” under the Form 26QB section. They can complete the correction request by Net Banking or AO approval or DSC.
Ans: A taxpayer will have to deduct TDS even when amounts are paid in instalments. TDS must be deducted on every instalment made.
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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.
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