TDS RETURN ON PURCHASE OF PROPERTY FORM 26QB

We, at K M Gatecha & Co LLP, believe in providing our clients with the complete range of services including TDS RETURN ON PURCHASE OF PROPERTY FORM 26QB in Ahmedabad related to taxation, compliance to Government rules and regulations, and investment, in an efficient and hassle-free manner. We assist and empower our clients with the help of our team of experts to complete any project or services availed by our clients. Our Services include Income Tax return services, accounting services, GST registration, returns and refunds, company Formation services, audit services, TDS returns filing, investment planning services and many more. More importantly we believe in providing our clients with the complete knowledge about the services that they are looking to avail of.

TDS RETURN ON PURCHASE OF PROPERTY FORM 26QB in Ahmedabad

According to Section 194-IA of the Income Tax Act, 1961, if an individual purchases immovable property exceeding Rs. 50 lakh, they are required to deduct TDS (Tax Deducted at Source) while making payment to the seller. The deducted TDS amount must be remitted to the government by submitting Form 26QB within 30 days from the end of the month in which the TDS deduction was initiated. For example, if a transaction commenced on June 15th, 2020, the TDS payment needs to be made to the government by July 31st, 2020. It's important to emphasize that this TDS deduction and payment obligation applies solely to the acquisition of immovable property post June 1st, 2013. If all formalities regarding the property were concluded before this date, the filing of TDS is not mandated under the provisions of the Income Tax Act.

Requirements Associated with Form 26QB

Section 194-IA of the Income Tax Act, 1961 lays down specific regulations concerning the purchase and sale of immovable properties such as land, buildings, and more. These regulations include:

The buyer is obligated to deduct TDS at a rate of 1% from the sale value of the immovable property at the time of the transaction.
The buyer is exempt from deducting TDS if the property’s cost is below Rs. 50 lakh.
The buyer is not required to obtain a Tax Deduction Account Number (TAN) to withhold and remit TDS to the government. However, PAN details of both the buyer and the seller are necessary if TDS is deducted using Form 26QB.
If there are multiple buyers and sellers involved, multiple Form 26QBs will be necessary.
If the property payment is made through installments, the TDS is deducted proportionally across each installment.

Following the deduction and settlement of TDS, the buyer must furnish a Form 16B (TDS certificate) to the seller within 15 days. In cases where there are multiple buyers, TDS must be paid at equal rates by all parties involved.

A buyer is exempt from TDS deduction if the immovable property is categorized as agricultural land.

It’s essential to understand that the concerned land will not be classified as agricultural if the following conditions are met:

The land, with a population exceeding 10,000, falls within the jurisdiction of a Cantonment or Municipality.
The land is located within the specified distance as indicated below:

Distance from Cantonment Board or Municipality	Population
Up to 2 kms	Minimum of 10,000 but not exceeding 1,00,000
Up to 6 kms	Minimum 1,00,000 but exceeding 10,00,000
Up to 8 kms	Above 10,00,000

Penalty Charges Associated with Form 26QB

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

Penalty Charges	Reasons
The buyer incurs a 1% interest charge on the amount not deducted for TDS.	If TDS is deducted
1% interest is charged monthly on the TDS amount that has not been remitted.	If TDS is deducted but not paid to the government
According to the provisions of Section 234E, taxpayers face penalty charges of Rs. 200 per day for late filing of TDS.	In case of delay in filing TDS
Penalties ranging from Rs. 10,000 to Rs. 1 lakh can be imposed as per Section 271H. However, no penalties will be levied if TDS is paid along with interest, fees, and the necessary statement within the specified timeframe.	Penalty charges under Section 271H of the Income Tax Act, 1961, can only be levied if a required statement is not submitted within the specified timeframe.

How to Fill Form 26QB Online?

Buyers need to adhere to the following steps to pay TDS online:

Step 1: Go to the official website of TIN NSDL.

Step 2: Locate the section for TDS on the sale of property and select “Online Form to File TDS”.

Step 3: Choose the appropriate challan based on applicability.

Step 4: Provide all the necessary details. Users should have the following documents readily available:

PAN details of the buyer and seller
Address and contact details of the 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” once a confirmation screen appears. An acknowledgment number will be displayed on the screen, and it’s advisable to save it for future reference.

Step 6: Upon confirmation, select the “Print Form 26QB Online” option to obtain a printout.

Step 7: Proceed by clicking on the “Submit to the Bank” option to initiate payment via the net banking platform, which is available for a list of authorized banks.

Step 8: Upon completion of the payment, a challan will be generated containing the CIN, bank name, and other payment details.

Here is a list of authorized banks through which TDS payments can be made:

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

As previously noted, following the payment of TDS, it is mandatory for the buyer to furnish Form 16B to the seller within 15 days, certifying the TDS amount remitted to the government.

Form 26QB Download

To download Form 16B, follow these steps:

Step 1: Visit the official TRACES website.

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

Step 3: Provide all the transaction details related to the property.

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

Step 5: Click on “Submit Request”.

Step 6: Once the download request is submitted, make a note of the download request number.

Step 7: Navigate to “Requested Downloads” and search using the download request number to locate Form 16B.

What is TDS on sale or purchase of property?

TDS is the tax amount deducted at source by the individual or company which is buying the property.

Do we need to file TDS return on purchase of property?

Yes, any individual or company which has made payment for a property purchased has to file a TDS return in Form 26QB.

What is the rate of TDS applicable on purchase of property?

If PAN card of seller is presented while filing Form 26QB then 1% TDS is to be deducted and if the PAN card is not presented, then 20% TDS is to be deducted.

What is the penalty if TDS is not deducted on purchase of property?

If TDS is not deducted by purchaser, then the TDS amount will be recovered by the Income Tax Department from him/her.
If TDS is not deposited by the purchaser after deducting it from paid amount, then the penalty in such case is up to INR 1lakh apart from the TDS amount, Interest Amount and late payment fees.

How to deduct TDS on purchase of property in case of joint owners?

TDS in case of joint owners is to be deducted only when sale amount of each owner is more than INR 50lakhs,
For each seller and each buyer, a separate form 26QB must be filled.

TDS RETURN ON PURCHASE OF PROPERTY FORM 26QB