The Income Tax Act stipulates numerous provisions for tax deduction and collection at source for various transactions. Among these transactions is the sale or purchase of immovable property. As per section 194-IA, a buyer needs to deduct TDS and remit the same through Form 26QB.
The deduction to TDS through 26QB takes place under certain conditions. Adhering to these rules and regulations is crucial to avoid penalties and punishment. However, you can pay the TDS and fill the Form 26QB online without any hassles.
Read on to learn the terms and conditions, how to fill and download the form, and more.
The sale and purchase of immovable property are subject to numerous taxes. One of these is TDS (Tax Deducted at Source), deducted by the buyer at a flat rate of 1%. To facilitate the payment, the government introduced Form 26QB.
Through Form 26QB, payment of the deducted tax can be made digitally. As such, it is also a challan cum online statement for a tax deduction. The form requires numerous information from the seller and the buyer.
Here are a few features of Form 26QB you must be aware of:
Buyer to deduct TDS at 1% from the total sale amount when completing a specific transaction
TDS under Section 194-IA does not apply to transactions related to agricultural lands
TDS on immovable property remains inapplicable for all transactions less than ₹50 Lakhs
For all payments made on an installment basis, TDS is deducted on each installment
There is no need for the buyer to obtain TAN for depositing TDS
PAN is mandatory for both the seller and buyer
As per the Finance Act, 2013, and Section 194-IA of the Income Tax Act, a buyer needs to deduct TDS on the purchase of immovable property. The deduction, however, is applicable only if the value of the property exceeds ₹50 Lakhs and for transactions made after June 1st, 2013.
In terms of the due date, you need to complete Form 26QB payment within one month from the month end in which the transaction was initiated. For example, if you initiated the transaction on October 15th, you need to pay the deducted taxes by November 30th.
You can file Form 26QB online on the official Income Tax website. While previously, the facility for direct tax payment was available on Protean (formerly NSDL), it has now been migrated to the Income Tax Department website.
To complete your 26QB payment, you can log in on the official Income Tax website and follow the steps given below:
Visit the e-pay Tax portal, which is https://eportal.incometax.gov.in/iec/foservices/#/e-pay-tax-prelogin/user-details
Enter the PAN and mobile details
Click on ‘Continue’ and choose ’26 QB TDS on Sale of Property’
Fill in the required details
Cross-check the information
Proceed with payment
Agree to the terms and conditions
Click on ‘Submit to Bank’
Authorise and complete the transaction
After completing the payment, you will receive a confirmation email and SMS.
At present, there are four authorised banks (Federal Bank, SBI, HDFC Bank, and Kotak Mahindra Bank). You can check the list of banks on the Income Tax website.
You can also make offline payments for Form 26QB. Download the form by following the steps given below:
Visit the official IT Department website
Navigate to the ‘Forms/Downloads’ tab and click on ‘Income Tax Forms’
Scroll to the bottom, enter page ‘18’ and click on enter
Find Form 26QB and click on the PDF icon next to the form
Download or print the form
Visit your bank and complete the payment
After you complete the payment, you will receive an acknowledgement number and receipt. Save this information for future reference. Ensure that the information you put is accurate to avoid any hassles.
To file and pay through 26QB, you will need to keep the following things in mind:
Keep the PAN of the buyer and seller, tax details, property and booking details ready
You will need to file multiple forms if there are multiple buyers or sellers
TDS is not applicable if the land is considered agricultural land
The TDS amount will be 1% of the total property value before taxes and costs
Submit Form 16B within 15 days of Form 26QB payment
If you do not file Form 26QB within the due date, you are liable to pay the following penalties.
No TDS deduction
1% interest on the TDS amount
Non-remittance of TDS
₹200 per day in case of delay in filing TDS
Statement not submitted within stipulated time u/s 271H
₹10,000 - ₹1 Lakh
Now that you know the procedure to pay TDS be sure to complete all the formalities before the due date to avoid paying the penalties. Remember, you need to issue Form 16B to the seller after filing Form 26QB.
The time frame for providing Form 16B is 15 days. The form is generally available within a week of filing Form 26QB. You can download the same by visiting the TRACES portal and providing the required information.
Form 26QB is the form that a buyer needs to file to pay the deducted TDS. However, this is only applicable on the purchase of immovable property valuing more than ₹50 Lakhs.
The buyer of the immovable property will deduct and pay TDS through Form 26QB.
No, the buyer needs to submit only their PAN to file Form 26QB.
Yes, you can pay TDS via Form 26QB through your bank. You can check the list of authorised banks on the official website.