Form 26QB - TDS on Sale of Property
In India, when an individual or a Hindu Undivided Family (HUF) purchases immovable property from a resident seller for a consideration of ₹50 Lakhs or more, the buyer is responsible for deducting Tax Deducted at Source (TDS) on the sale amount. This deduction is mandated under Section 194-IA of the Income-Tax Act, 1961, and must be reported using Form 26QB.
What is Form 26QB?
Form 26QB is a challan-cum-statement for reporting TDS on the sale of immovable property. Unlike other TDS statements (like Form 24Q or Form 26Q) which are filed quarterly by deductors having a TAN, Form 26QB is a unique form to be filled out by the buyer (deductor) and submitted online for each transaction.
Key Features of TDS on Property Sale (Section 194-IA):
- Applicability: Applicable when the consideration for the transfer of immovable property (other than agricultural land) is ₹50 Lakhs or more.
- Rate of TDS: The TDS rate is 1% of the sale consideration.
- Responsibility: The buyer (transferee) is responsible for deducting TDS at the time of payment or credit of sale consideration to the seller (transferor), whichever is earlier.
- No TAN Required: The buyer does not need to obtain a Tax Deduction and Collection Account Number (TAN) to deduct and deposit this TDS. The PAN of both the buyer and the seller is sufficient.
How to File Form 26QB?
The entire process of deducting and depositing TDS on property sale, and subsequently generating the TDS certificate, is done online. Here's a brief overview:
- Access the e-filing portal: The buyer needs to log in to the Income Tax Department's e-filing portal.
- Fill Form 26QB: Provide details of the buyer, seller, property, and the amount of consideration. The PAN of both the buyer and seller are mandatory.
- Make Payment: The TDS amount can be paid online through net banking or debit card at the time of filling the form, or by visiting authorized bank branches with the generated challan.
- Acknowledgement: Upon successful submission and payment, an acknowledgement number is generated.
Due Date for Filing and Deposit:
The TDS deducted under Section 194-IA must be deposited to the government within 30 days from the end of the month in which the deduction was made. Form 26QB itself is filed along with this payment. There are no quarterly due dates for Form 26QB like other TDS statements.
Failure to deduct or deposit TDS on time, or furnishing incorrect information in Form 26QB, can lead to penalties and interest charges for the buyer.
Issuance of TDS Certificate (Form 16B):
Once the TDS is successfully deposited using Form 26QB, the buyer can download Form 16B (the TDS certificate for property sale) from the TRACES portal. This certificate must then be provided to the seller. The seller can use Form 16B to claim credit for the TDS when filing their Income Tax Return and reporting the capital gains from the sale of property.