The Income Tax Department introduced the Tax Deducted at Source (TDS) system to facilitate quick and efficient tax collection. According to the Finance Act of 2013, individuals or Hindu Undivided Families (HUFs) purchasing real estate valued at ₹50 lakh or more must deduct TDS while making payments to the seller. The deducted TDS amount must then be deposited with the government using Form 26QB within a specified timeframe.

This article provides a comprehensive overview of Form 26QB and its filing process. Read on to learn more.

What Is Form 26QB?

Under the Income Tax Act, 1961, specific rules govern the purchase and sale of immovable properties. Section 194-IA mandates buyers to deduct TDS at 1% of the transaction value or the stamp duty value, whichever is higher, when the property’s transaction value exceeds ₹50 lakh.

For instance, if you purchase a property for ₹90 lakh, TDS will be calculated on the full ₹90 lakh and not on the excess amount of ₹40 lakh (90 – 50 lakh).

Form 26QB is an online form that serves as both a statement and a challan for TDS payment. The buyer must submit this form to pay TDS on property transactions. It requires detailed information about the property, buyer, seller, and tax deposit, and is available on the official Income Tax Department website.

When to File Form 26QB?

Buyers must file Form 26QB within 30 days from the end of the month in which TDS was deducted.

Example:

If you purchase a property on December 15, 2023, the TDS amount must be deposited, and Form 26QB filed on or before January 30, 2024.

Failure to file within the due date attracts a late fee of ₹200 per day, which continues until the form is submitted.

How to File TDS Using Form 26QB

Here is a step-by-step guide to filing TDS through Form 26QB:

Step 1: Visit the official Income Tax Department website and log in.

Further steps would involve providing the required details, but this summary highlights the initial step to begin the process.

Step 2: Go to the ‘E-file’ section on the Income Tax Portal. Select ‘e-pay Tax’ and then click ‘Proceed’ under the ’26QB (TDS on Sale of Property)’ option in the ‘New Payment’ section.

Step 3: Complete the form by providing the required information across three pages:

Buyer Details: Basic information about the buyer.
Seller Details: Basic information about the seller.
Property and Tax Details: Information about the property, TDS amount, payment details, address, and contact information.

Step 4: On the next screen, select your preferred payment mode. You can choose between:

‘Pay Now’ to make an immediate payment.
‘Pay Later’ for deferred payment.

Step 5: If you choose ‘Pay Now’, proceed to pay the TDS amount. Once the payment is completed, a Form 26QB Acknowledgement will be generated, which you can download for your records.

Step 6: After the Form 26QB submission is processed, you can log in to the TRACES Portal as a taxpayer to generate and download the TDS Certificate.

How to Download Form 26QB

Follow these steps to download Form 26QB easily:

Step 1: Visit the official Income Tax website and log in with your credentials. Navigate to e-file > e-pay taxes.

Step 2: Go to the Payment History section. If Form 26QB has been filed, you will see an entry under the Type of Payment: TDS on Sale of Property (800). Under the Action column, you will find options to download the receipt or statement for Form 26QB.

Here’s a sample Form 26QB.

Penalty Charges Related to Form 26QB

The table below outlines the penalty charges and reasons associated with Form 26QB:

SL No.	Reason for Penalty	Penalty Charges
1	Delay in filing TDS	₹200 per day of delay as per Section 234E.
2	TDS deducted but not remitted to the government	1.5% interest per month on the outstanding TDS amount.
3	Non-deduction of TDS	1% interest per month on the amount not deducted.
4	Failure to submit the required statement on time	Penalty ranging from ₹10,000 to ₹1,00,000 under Section 271H. No penalty applies if dues are cleared within a specific timeframe.

Final Thoughts

Form 26QB serves as a combined challan and return statement for depositing TDS on property purchases. For buyers, it is crucial to file this form within the specified deadline to avoid significant penalties.

For professional assistance with TDS filings, including Form 26QB, reach out to KMG CO LLP for expert guidance and support.

Need Help?

FAQs

Can I Check My TDS Deduction Online?

Yes, you can check your total TDS deductions online using Form 26AS. To do this:

Visit the e-filing portal of the Income Tax Department.
Log in using your credentials.
Navigate to the ‘View Form 26AS’ section.
Select the relevant assessment year and download the form in PDF format.

Is It Possible for the Builder to Pay TDS on Behalf of the Buyer?

No, the responsibility for TDS deduction rests solely with the buyer. Even if the property is purchased via a home loan or directly from a builder, the buyer is required to make the TDS payment.

Can I File a Correction Return for Form 26QB?

Yes, corrections can be made if there is an error in the original filing of Form 26QB. Corrections, such as changes in amount, address, or date, can be submitted online via the TRACES portal using Aadhaar or Net Banking OTP for authentication. However, these changes must be approved by the seller as well.