Form 26QB

As per the provisions under Section 194-IA of Income Tax Act, 1961, when an individual buys immovable property worth more than Rs. 50 lakh, he or she has to deduct TDS when paying the seller. The TDS amount is paid to the government by filing Form 26QB in under 30 days from the month’s end for which TDS was deduction was initiated.

For example, if a transaction was initiated on June 15th, 2020, the TDS amount must be paid to the government by July 31st, 2020. However, it is essential to note this TDS deduction and payment is only applicable if an immovable property was purchased after June 1st, 2013. If formalities involving the property were completed before the date, filing TDS is not required as per the Income Tax Act provisions. 

Requirements Associated with Form 26QB

Section 194-IA of Income Tax Act 1961 set a few rules related to buying and selling immovable property such as land, building, and more. They are as follows:

• A buyer must deduct TDS at the rate of 1% from the sale value of the immovable property at the time of the transaction.
• A buyer does not have to deduct TDS payment on purchase of property if its cost is below Rs. 50 lakh. 
• A buyer doesn’t need to acquire a Tax Deduction Account Number (TAN) to collect and pay TDS to the government. However, PAN details of both buyer and seller are necessary if TDS is deducted using Form 26QB.
• Multiple Form 26QBs will be required in case there are numerous buyers and sellers.
• If the property’s payment is made in instalments, TDS is deducted in instalments on a pro-rata basis.
• Post deduction and payment of TDS, a buyer has to issue a Form 16B (TDS certificate) to the seller within 15 days. TDS has to be paid equally at similar rates by all buyers in case of more than one buyer.
• A buyer does not have to deduct TDS if the immovable property is considered as agricultural land.

Please note that the concerned land will not be considered as agricultural if these two conditions are true:

• The land with a population of more than 10,000 is situated in an area that comes under the jurisdiction of Cantonment or Municipality jurisdiction 
• The land is situated in any area within the distance given below:

Penalty Charges Associated with Form 26QB

The table given below gives the penalty charges associated with Form 26QB:

How to Fill Form 26QB Online?

Buyers must follow the steps given below to pay TDS online:

Step 1: Visit the official website of TIN NSDL.

Step 2: Navigate to TDS on sale of property and click on “Online Form to File TDS”.

Step 3: Choose the challan as per applicability.  

Step 4: Enter all details as required. Users should be keeping these documents handy:

• PAN details of buyer and seller
• Address and contact details of buyer and seller
• Property documents 
• The total amount paid and the amount of tax deposited 

Step 5: After entering all the required information, submit the form and click on confirm after a confirmation screen appears. An acknowledgment number is displayed on the screen. It is recommended that one saves it for future reference.

Step 6: After confirmation, click on the Print form 26QB online option to take a printout. 

Step 7: Click on the “Submit to the bank” option to make the payment via the net banking platform which is available for a list of authorised banks. 

Step 8: Once the payment is complete, a challan is generated, which consists of CIN, bank name and other payment details.

Here are some authorised banks through which one can make payment of TDS –

• Central Bank of India
• Bank of Maharashtra
• Bank of India
• United Bank of India
• Union Bank of India
• Bank of Baroda
• ICICI Bank
• HDFC Bank
• Corporation Bank
• UCO Bank
• Canara Bank
• State Bank of India
• Indian Overseas Bank
• Indian Bank
• IDBI Bank
• Punjab National Bank
• Punjab and Sind Bank
• Jammu and Kashmir Bank

As noted above, after payment of TDS, a buyer has to issue Form 16B to the seller within 15 days in lieu of TDS amount paid to the government. 

Form 26QB Download

Form 16B can be downloaded 5 days after filing Form 26QB by following the steps mentioned below:

Step 1: Visit the official TRACES website. 

Step 2: Register and log in to the TRACES portal using PAN details.

Step 3: Enter all information about the transaction involving the property.

Step 4: Enter the Acknowledgment Number, Assessment Year, and PAN of the seller. Then click on proceed. 

Step 5: Click on “Submit Request”.

Step 6: Once the download request is submitted, note down the download request number.

Step 7: Click on the “Requested Downloads” and search with the download request number to find Form 16B.