As per the Income Tax Act, if the buyer purchases any property from the seller and the consideration exceeds the specified limit then the buyer is liable to file Form 26QB. Further, form 26QB is a challan-cum return statement that contains the details of the property along with the amount of tax that needs to be deducted.
What is Form 26QB?
- Any individual/HUF buying an immovable property worth INR 50 lakhs or more needs to deduct TDS. Further, TDS is applicable as per section 194IA of the Income Tax Act.
- TDS will be deducted @ 1% from the sale consideration paid to the resident seller.
- Consideration for transfer of any immovable property shall include payments made for the club membership fees, car parking fees, electricity, water facility fee, maintenance fee, advance fee, or any other charges of similar nature.
- The buyer of the property needs to file TDS Return in Form 26QB. Also, TAN is not compulsory for the Buyer or Seller of the property. PAN of the buyer and seller is compulsory.
- TDS will be deposited along with Form 26QB.
- The buyer needs to issue a certificate of the same in Form 16B within 15 days from the due date for furnishing the challan-cum-statement in Form 26QB.
When to file Form 26QB?
The buyer needs to file Form 26QB within 30 days from the end of the month in which the tax deduction is made.
Let’s take an example to understand this:
Shyam purchased a property from Vikas. A sales consideration of INR 54,00,000 was paid on 15th December 2020. Here, Form 26QB needs to be filed on or before 30th January 2021 and if the return is not filed within the due date then late fees of INR 200/per day will be levied till the return is filed. Also, the late fee will not exceed the amount of TDS deducted.
What are the details required to file Form 26QB?
The following information is required:
- PAN of the buyer and seller.
- Complete Address of buyer and seller.
- Contact Details of buyer and seller.
- Property Details.
- Amount Paid/ Credited.
- Tax Deposit details.
How to file Form 26QB online?
- Go to the TIN NSDL website,
Go to Services> Select TDS on Sale of Property.
- Click on the Online form for furnishing TDS on Sale of Property (Form 26QB)
- Fill the details in the form
Details of Buyer, Seller, Property, TDS, etc need to be added.
- Make a payment of TDS and save the acknowledgment
Payment can be made either immediately or at a later date. Further, an acknowledgment will be generated upon successful submission.
Yes. Whenever a property is sold, a TDS of 1% is deducted by the buyer. Later, this TDS is deposited with the Government by the buyer. Hence TDS credits are allowed for the seller in their TDS Return.
In case the TDS has not been deducted on the property purchased, a 1% interest per month on the amount not deducted would be required to pay by the buyer.
Yes, The government has facilitated the revision of this form through the TRACES account. Hence, the buyer can log in to the TRACES and make the corrections in the permitted areas.
The buyer of the property has to deduct the TDS either at the time of executing the deed or at the time of advance payment, in case any advance is paid before executing the deed.
If the seller doesn’t have a PAN, then the TDS would be deducted at the rate of 20%.