Introduction:

The income tax department implemented the TDS tax deduction system for efficient and expedient tax collection. According to the Finance Act of 2013, any Hindu Undivided Family (HUF) or individual buying real estate valued at Rs 50 lakh or more is obligated to deduct TDS during the transaction with the seller. This deducted TDS sum must then be remitted to the government by completing Form 26QB within a designated time frame.

In this article, we will examine all the relevant aspects of the online Form 26QB. Scroll down to go into details.

Form 26QB:

Form 26QB serves as a combined return and challan form, providing details on TDS deductions related to property payments governed by Section 194IA. Accessible on the TIN (Tax Information Network) website, this online form is utilized for verifying deducted taxes.

The buyer is required to fill this form to facilitate payment of TDS on the sale of the property within the specified period. Essential information  such as property information, buyer and seller information, and tax liens are mandatory. This form is conveniently available on the Income Tax website.

Steps to Download Form 26QB:

• Below are the steps to follow for downloading Form 26QB:
• Access the TIN Protean website.
• Navigate to the “Services” tab, then select “TDS on Sale of Property.”
• Now, open another web page and click on “Online form for furnishing TDS on property (Form 26QB).
• Complete the form by entering details including PAN and communication addresses of both the buyer and seller, property specifics, payment amounts, and tax deposit particulars.
• Complete the form and submit and confirm. A new page appears, providing a unique acknowledgment number that you should save for future use.
• On the same page, select “Print Form 26QB” to generate a printable version of the 26QB form. Subsequently, click on “Submit to the bank” to proceed with the online payment via net banking. This will direct you to the payment page accessible through the net banking facilities of various banks.
• Upon successful payment, the invoice counter will be displayed, with CIN, payment details and bank name.
• The downloaded form is password-protected, with the password being the PAN of the buyer in block letters.

When to File Form 26QB:

• If you are the buyer, you must file and submit Form 26QB within 30 days from the end of the month in which the tax was deducted. To illustrate this further, let’s consider an example:
• For instance, if you purchase a property , with the transaction commencing on 5 December 2023, you are required to submit the TDS amount by 30 January 2024. Failure to meet this deadline will result in a late fee of Rs 200 per day.

Steps to Paying TDS through Form 26QB Online: 

• Below are the steps to pay TDS through Form 26QB online:
• Go to the official website of the Tax Information Network and go to the ‘Services’ tab.
• A dropdown menu will appear; select ‘e-Payment: Pay Taxes Online’.
• On the new page, locate ‘TDS on Property (Form 26QB)’ and click ‘Proceed’.
• Complete the provided form within the allocated time frame of 30 minutes. Ensure to input all the required details, and have the following information readily available before proceeding:
• Name, Property details,  Contact information, Tax deposit details, PAN
• On the taxpayer details page, enter the tax code (0020 for corporate or 0021 for non-corporate payer), residential status, buyer PAN and seller PAN.
• The next two tabs should provide complete address details for the transferor, transferor and purchased property. Then, add up the amount of taxes you have withheld, provide information and figures for the amount due.
• On the following page, select your preferred mode of payment. You have two options: ‘e-tax payment immediately’ or ‘e-tax payment on the subsequent date’. Then, proceed by clicking ‘Proceed’ to pay the deducted TDS amount.

Documents Required:

• To file Form 26QB, the following documents are required:
• PAN of both the purchaser and seller of the immovable property is required.
• Details of the challan for the TDS deposited are required.
• Proof of identity and proof of address for both the buyer and seller are necessary.
• Sale deed

Penalty:

• In case of delay in filing TDS, as per Section 234E, a penalty of Rs.200 will be levied for each day of delay.
• For non-deduction of TDS, a penalty of 1% interest is levied on the amount not deducted.
• If TDS is deducted but not remitted to the Government, interest at the rate of 1.5% per month is charged on the balance.
• Failure to file the required statement within the time limit is liable under Section 271H which carries a penalty ranging from Rs 10,000 to Rs 1 lakh. However, if you remit the TDS along with the applicable tax, interest and required information within the specified period, no penalty will be levied.

Key Things to Know:

• If payment is made in installments, TDS is deducted in installments.
• TDS applies to the entire transaction value. For instance, if the property you’ve purchased costs ₹50 lakh, 1% TDS of ₹50,000 would be applicable.
• Once the TDS is deducted, the buyer is required to submit the TDS certificate to the seller, which can be obtained through Form 26QB approximately two weeks after depositing TDS if apart from this, the buyer must obtain a Form 16B to the seller.
• Under Section 194IA of the Income Tax Act, TDS applies to all immovable property, including commercial property, residential buildings and plots. however, it does not apply to agricultural land.
• Buyers are only required to deduct TDS for transactions of ₹50 lakh or more, while sellers are not subject to this requirement.

Conclusion:

Form 26QB is the challan cum return statement required for deposit of TDS on property transactions. Timely submission of this form is important for consumers to avoid significant penalties. Any buyer who acquires new property has to deduct and remit TDS at the rate of 1% of gross sales within 30 days from the month following the deduction. Using TIN NSDL’s website, tax deduction can be submitted electronically through Form 26QB. Failure to comply with this requirement may result in penalties.